India’s foreign exchange reserves fell by $5.654 billion, reaching $666.933 billion, as the Reserve Bank of India stepped up market intervention and Prime Minister Narendra Modi called on citizens to conserve foreign exchange amid global pressures.
Illustration: Dado Ruvic/Reuters
The RBI reported a sharp decline in the week ending June 26, following a period when reserves had surged to an all‑time high of $728.494 billion before the West Asia conflict intensified, prompting dollar‑selling operations to stabilize the rupee.
Key Points
- India’s forex reserves fell $5.65 billion for the week ended June 26, settling at $666.93 billion.
- The decline follows a record peak of $728.494 billion reached before the West Asia conflict.
- Reserve Bank of India intervened through dollar sales to curb pressure on the rupee.
- Prime Minister Narendra Modi urged the public to limit foreign travel, curb fuel usage, and avoid gold purchases to preserve foreign exchange.
- Both foreign‑currency assets and gold reserves contracted during the reporting week.
India’s forex reserves dropped $5.65 billion to $666.93 billion for the week ended June 26, the RBI said on Friday.
During the preceding reporting week, the reserves had increased by $963 million to $672.59 billion.
Impact of Global Events on Reserves
The reserves hit a record high of $728.494 billion for the week ending February 27 this year, but the onset of the West Asia conflict triggered several weeks of outflows. The rupee came under pressure, compelling the RBI to intervene via dollar sales.
Prime Minister Narendra Modi launched a public appeal on May 11, calling on Indians to conserve foreign exchange by reducing overseas travel, limiting fuel consumption, and refraining from gold purchases for a year.
Components of the Decline
Foreign‑currency assets, the largest component of the reserves, decreased by $150 million to $541.07 billion for the week ended June 26, according to central bank data.
The value of gold reserves fell $5.39 billion to $102.54 billion during the same period.
Special drawing rights (SDRs) slipped $89 million to $18.56 billion, and India’s reserve position with the IMF declined $21 million to $4.77 billion at the end of the reporting week.