India’s foreign exchange reserves declined by USD 8.09 billion to USD 688.89 billion for the week ended May 15, mainly due to a fall in foreign currency assets, according to RBI data released on Friday.
In the previous reporting week, the overall reserves had jumped by USD 6.295 billion to USD 696.988 billion.
The foreign currency assets (FCAs), a major component of the reserves, dropped by USD 6.48 billion to USD 545.90 billion during the week, the RBI’s weekly showed.
Expressed in dollar terms, FCAs include the effect of appreciation or depreciation of non-US currencies such as the euro, pound and yen held in the foreign exchange reserves.
The value of gold reserves also decreased by USD 1.53 billion to USD 119.31 billion during the week, the data showed.
Special Drawing Rights (SDRs) were down by USD 49 million to USD 18.82 billion, while India’s reserve position with the International Monetary Fund (IMF) fell by USD 25 million to USD 4.85 billion.
On a year-on-year basis, the country’s forex reserves were higher by USD 3.16 billion.
The forex kitty had expanded to an all-time high of USD 728.494 billion during the week ended February 27 this year before the start of West Asia conflict and the disruptions in the Strait of Hormuz, which led to the surge in crude oil prices. The rupee came under immense pressure and foreign exchange reserves witnessed a decline, prompting Prime Minister Narendra Modi to urge citizens adopt austerity measures. Prime Minister Modi appealed to households to postpone gold purchases and cut discretionary foreign exchange spending to help the country cope with higher oil and fertiliser costs.