India's forex reserves plunge by $4.38 billion: Here's why
India's foreign exchange reserves dropped by $4.38 billion to $690.72 billion in the week ending August 22, according to the RBI.
This comes right after a bump up the previous week and shows how quickly things can shift in global finance.
These reserves are basically India's financial safety net, generally made up of foreign currencies, gold, SDRs, and its position with the IMF.
Breakdown of forex reserves
Most of India's forex stash is in foreign currency assets, but gold reserves have seen some fluctuation.
The RBI steps in sometimes to sell dollars and keep the rupee steady when markets get shaky.
Why do big swings in forex reserves matter?
Big swings in forex reserves matter because they help India pay for imports and shield us from global shocks.
After hitting an all-time high of $704.885 billion in September 2024, this recent drop is a reminder that managing such a huge reserve takes constant work—especially with world economies always changing.