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India’s Forex Reserves Drop by $10.7 Billion, Hit $690.43 Billion
India’s foreign exchange (forex) reserves saw a sharp decline for the second consecutive week, dropping by USD 10.746 billion to reach USD 690.43 billion for the week ending October 11, according to data released by the Reserve Bank of India (RBI) on Friday. This marks one of the largest decreases in recent times, following a USD 3.709 billion dip in the previous reporting week.
At the end of September, the country’s forex reserves had reached an all-time high of USD 704.885 billion, but the significant decline over the past two weeks has brought it down considerably.
Foreign Currency Assets Lead Decline
The bulk of the decline in forex reserves is attributed to the fall in foreign currency assets, a key component of the reserves. For the week ending October 11, foreign currency assets decreased by USD 10.542 billion, bringing the total down to USD 602.101 billion.
Impact of Currency Fluctuations
Foreign currency assets, expressed in dollar terms, also reflect the impact of fluctuations in the value of other currencies such as the euro, pound, and yen, which are held in the reserves. The appreciation or depreciation of these non-US currencies affects the overall value of the reserves.
The continued decline in forex reserves raises concerns over external financial stability, as India monitors these trends closely amidst global economic uncertainty.
