India’s foreign exchange reserves experienced a notable decline of $10.7 billion during the week ending October 11, 2024. According to the RBI’s Weekly Statistical Supplement, the total reserves now stand at $690 billion.
Breakdown of Reserve Components
- Foreign Currency Assets (FCAs): The primary component of the reserves, FCAs, decreased by $10.5 billion to $602 billion. Fluctuations in non-US currencies like the euro, pound, and yen within the reserves impacted this decline.
- Gold Reserves: India’s gold reserves saw a marginal decrease of $98 million, bringing the total to $65.6 billion.
- Special Drawing Rights (SDRs): SDRs declined by $86 million to $18.3 billion.
- Reserve Position in the International Monetary Fund (IMF): The reserve position in the IMF fell by $20 million to $4.3 billion.
RBI Intervention to Stabilize the Rupee
To counterbalance market volatility and prevent a sharp depreciation of the Indian rupee, the RBI occasionally intervenes in the foreign exchange market. The central bank closely monitors market movements and takes action to maintain stability without adhering to a fixed exchange rate target.
Challenges and Implications
The recent decline in India’s foreign exchange reserves underscores the ongoing challenges in managing currency stability amidst fluctuating global markets. The RBI’s proactive measures to intervene and stabilize the rupee reflect its commitment to preserving orderly market conditions.
Key Takeaways
- India’s foreign exchange reserves have decreased by $10.7 billion.
- Foreign currency assets, gold reserves, SDRs, and the IMF reserve position have all declined.
- The RBI intervenes in the market to stabilize the rupee.
- The decline highlights challenges in managing currency stability amidst global market fluctuations.
 data reveals that India's foreign exchange reserves have experienced a significant decline, falling by $10.7 billion to $690 billion as of October 11, 2024.){kind=link}