India's foreign exchange reserves witnessed a further decline, dropping by USD 2.335 billion to USD 590.702 billion for the week ending September 22, as reported by the Reserve Bank of India (RBI) on Friday.
In the preceding week, the reserves had decreased by USD 867 million to USD 593.037 billion. This recent dip follows a significant peak reached in October 2021 when India's foreign exchange reserves soared to an all-time high of USD 645 billion.
The decline in reserves can be attributed to the central bank's efforts to stabilise the rupee amidst challenges arising from global developments since the previous year.
The major component of India's reserves, the foreign currency assets, contracted by USD 2.552 billion to USD 523.363 billion for the week ending September 22, as indicated in the Weekly Statistical Supplement released by the RBI.
These foreign currency assets account for various currencies, including the euro, pound, and yen, and their value is influenced by fluctuations in exchange rates.
Gold reserves, however, saw a slight increase, rising by USD 307 million to USD 44.307 billion during the same period, according to the RBI.
Additionally, the Special Drawing Rights (SDRs) experienced a decline of USD 79 million, falling to USD 18.012 billion. India's reserve position with the International Monetary Fund (IMF) also witnessed a decrease of USD 11 million, reaching USD 5.019 billion in the reporting week, as indicated in the data provided by the apex bank.
The country's fluctuating foreign exchange reserves highlight the challenges faced in managing economic stability amidst global uncertainties. Analysts and policymakers continue to monitor these developments closely, aiming to ensure a balanced approach to safeguarding India's economic resilience.