The reserves have been on a downward trend for the last few weeks, and the fall has been attributed to revaluation and RBI forex market interventions to help reduce volatility in the rupee.
India’s forex reserves declined by $5.693 billion to $634.585 billion in the week ended January 3, the Reserve Bank of India said on Friday. In the previous reporting week, the kitty had fallen by $4.112 billion to $640.279 billion.
The reserves had been trending down for the past few weeks, and the fall had been put on revaluation apart from forex market interventions by RBI to try to bring in lesser volatility in the rupee. Forex reserves had peaked at an all-time high of $704.885 billion.
The data released on Friday showed that foreign currency assets, a major component of reserves, decreased by $6.441 billion to $545.48 billion for the week ended January 3.
In dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound, and yen held in the foreign exchange reserves.
According to the RBI, gold reserves increased by $824 million during the week to $67.092 billion. The SDRs decreased by $58 million to $17.815 billion. Apex bank data showed that India’s reserve position with the IMF dropped by $18 million to $4.199 billion in the reporting week.
