India's foreign exchange reserves drop by $11.68 billion
India's foreign exchange reserves fell by $11.68 billion in the week ended March 6, 2026, now sitting at $716.81 billion, the biggest weekly drop in over a year.
The Reserve Bank of India (RBI) stepped in, selling US dollars to help steady the rupee as global tensions like the Iran conflict and rising oil prices put pressure on our currency.
Reserves are India's financial safety net
These reserves are basically India's financial safety net: Excluding gold, India's foreign exchange reserves cover about 8.7 months of imports.
If they keep shrinking, it could get tougher for the RBI to protect the rupee from future shocks, which might mean higher prices for things we import.
Reserve Bank of India is trying to manage things
It wasn't just dollar sales; Valuation losses of roughly $5.4 billion also contributed to the decline.
The RBI is trying to manage things with bond purchases and other tools, but continued reserve declines could make it harder for the RBI to intervene in foreign-exchange markets.