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India’s foreign exchange reserves, as reported by the Reserve Bank of India (RBI), have decreased for a fourth consecutive week, reaching $586.91 billion as of September 29. This marks the lowest level in over five months, with a decline of $3.8 billion from the previous week. Over the past three weeks, the reserves had fallen by a total of $8.2 billion.

The central bank plays an active role in the spot and forwards markets to prevent extreme fluctuations in the value of the Indian rupee (USD/INR). RBI Governor Shaktikanta Das emphasized the significance of the central bank’s intervention, emphasizing that India’s foreign exchange reserves are “sizeable” and “very comfortable.” The primary objective of this intervention is to maintain stability in the exchange rate of the rupee.

It’s important to note that changes in foreign currency assets, when expressed in dollar terms, take into account the impact of currency appreciation or depreciation in other currencies held within the RBI’s reserves. India’s foreign exchange reserves also encompass its Reserve Tranche position in the International Monetary Fund (IMF).

During the week to which the forex reserves data pertains, the rupee had depreciated by 0.1% against the dollar and traded within a range of 83.0225 to 83.2450. The week concluded with the rupee closing at 83.2450, marking a 0.2% decline for the week.

Foreign Exchange Reserves (in million U.S. dollars) as of September 29, 2023:

  • Foreign currency assets: $520,236
  • Gold: $43,731
  • Special Drawing Rights (SDRs): $17,939
  • Reserve Tranche Position: $5,002
  • Total: $586,908

Comparatively, the data from September 22, 2023, indicated higher reserves at $590,702. The declining trend in foreign exchange reserves suggests the central bank’s active involvement in maintaining currency stability and managing market dynamics.