Forex watch: Reserves slip below $700 billion; FCAs decline, gold holdings rise
In the previous week, the country’s forex reserves had declined by $2.334 billion to $700.236 billion, PTI reported.Foreign currency assets, the largest component of the reserves, dropped $4.049 billion to $577.708 billion, the RBI said.
These assets are affected by fluctuations in non-US currencies such as the euro, pound, and yen held in the reserves.Gold reserves rose $3.753 billion to $98.77 billion during the week.
Special Drawing Rights (SDRs) increased by $25 million to $18.814 billion, while India’s reserve position with the IMF edged down by $4 million to $4.667 billion.Foreign exchange reserves act as a crucial cushion against external shocks, including sharp oil price fluctuations, currency swings, and global financial turbulence.
They are considered a key measure of a nation’s capacity to meet import bills and intervene in currency markets to stabilise the rupee when required.
The Reserve Bank of India manages these reserves to safeguard financial stability and bolster confidence in the external sector, with its weekly statistical supplement, released every Friday, providing a snapshot of India’s forex position and resilience against external risks.
