India’s Forex Reserves Fall to Over One-Year Low
The RBI has been selling dollars to defend the rupee, which has declined 4% since the U.S.-Iran war began, as surging energy prices sparked capital outflows
Mumbai: India's foreign exchange reserves fell to a more than one-year low of $681.4 billion in the week ended May 22, from $688.89 billion a week earlier, the Reserve Bank of India (RBI) data showed on Friday.
The $7.5 billion decline was largely due to a $4.5 billion fall in the value of the central bank's gold holdings, week-on-week.
The value of the RBI's foreign currency assets also shrunk by nearly $3 billion to $543 billion.
The kitty had expanded to an all-time high of USD 728.494 billion during the week ended February 27 this year before the onset of the Middle East conflict that led to several weeks of a drop as the rupee came under pressure and the RBI had to intervene in the forex market through dollar sales.
The RBI has been selling dollars to defend the beleaguered rupee, which has declined 4% since the U.S.-Iran war began, as surging energy prices sparked capital outflows and clouded India's macroeconomic outlook.
Prime Minister Narendra Modi has also made multiple public appeals to countrymen to conserve forex by cutting down on foreign travel, limiting fuel use and refraining from gold buys for a year.
For the week ended May 22, foreign currency assets, a major component of the reserves, decreased USD 2.872 billion to USD 543.032 billion, the central bank's data showed.
Expressed in dollar terms, the foreign currency assets include effects of appreciation or depreciation of non-US units, such as the euro, pound, and yen, held in foreign exchange reserves.
The value of gold reserves also declined USD 4.53 billion to USD 114.786 billion during the week, the RBI said.
The Special Drawing Rights (SDRs) were down by USD 77 million to USD 18.748 billion, the apex bank said.
India's reserve position with the IMF was also down by USD 33 million to USD 4.818 billion at the end of the reporting week, according to the RBI data.
Changes in foreign currency assets, expressed in dollar terms, include the effect of appreciation or depreciation of other currencies in the reserves.
In the week to which the data pertains, the Rupee slid to a record low of 96.96 per dollar before being shored up by firm RBI intervention over multiple trading sessions, including likely on Friday.
It ended the session at 95 per dollar, up 0.7% week-on-week. Foreign exchange reserves include India's Reserve Tranche position in the International Monetary Fund.
FOREIGN EXCHANGE RESERVES (in million U.S. Dollars):
May 15 2026:
Foreign currency assets: 545,904
Gold: 119,317
SDRs: 18,824
Reserve Tranche Position: 4,850
Total: 688,894
May 22 2026:
Foreign currency assets: 543,032
Gold: 114,786
SDRs: 18,748
Reserve Tranche Position: 4,818
Total: 681,384