India’s Forex Reserves Drop To $670.12 Bn In Week Ended 9 Aug

Registering a decrease of USD 4.8 billion from the previous all-time high, India’s foreign exchange reserves (forex reserves) reached USD 670.12 billion during the week ending 9 August 2024, according to the weekly statistical supplement from the Reserve Bank of India. The forex reserves touched an all-time high at USD 674.919 billion for the week that ended on 2 August.

As per the data from the apex bank, the Foreign Currency Assets (FCAs), the biggest component of the forex reserves, reported a drop of USD 4.07 billion. The FCAs for the week ending 9 August were at USD 587.9 billion. The FCAs, expressed in dollar terms, include the appreciation or depreciation effect of non-US units like the euro in the forex reserves.

The FCAs exclude the apex bank's special drawing rights (SDR) holdings as they are included under the SDR holdings. It also excludes the investment in bonds issued by IIFC.

The gold reserves witnessed a fall of USD 860 million and dropped to USD 59.23 billion. On the other hand, the SDRs for the week inched up by USD 121 million to touch USD 18.28 billion. The data from the RBI revealed that the reserve position in the IMF improved by USD 18 million to USD 4.63 billion.

The apex bank monitors the foreign exchange markets and intervenes only to maintain orderly market conditions. It does that by containing excessive volatility in the exchange rate, without reference to any pre-determined target level or band. The RBI intervenes in the market through liquidity management, including the sale of dollars, to prevent the steep depreciation in the rupee.