India's Forex Drops to $529.99 Bn After Decline In Gold Reserves

India’s forex reserves have dropped $1.09 Bn during the week ended November 4 to $529.99 Bn. The primary reason is decline in India's gold's reserves. This comes after the biggest jump of 2022 which ended on October 28 last week, when the reserves swelled to $531.08 Bn.

In October 2021, the country’s forex had reached an all-time high of $645 billion. The reserves have been declining as the central bank deploys the kitty to defend the rupee amid pressures caused by global developments. Foreign currency assets (FCA), a major component of the overall reserves, decreased by $120 Mn to $470.727 Bn during the week according to  RBI. Expressed 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.

The central bank said the gold reserves dropped by $705 million to $37.057 billion. India's reserve position with the International Monetary Fund also dipped by $27 million to $4.82 billion in the reporting week, while the special drawing rights were down by $235 million to $17.39 billion. Further, the country’s reserve position with the International Monetary Fund also dipped by $27 million to $4.82 billion in the reporting week. The forex reserves have been falling due to the capital outflow amid recession concerns and the RBI has spent a significant amount to shore up the rupee. The domestic currency has declined about 9 per cent during the current calendar year.