India’s Forex Reserves Drop $5.69 Billion to $634.58 Billion as of Week Ending January 3, 2025

India’s foreign exchange reserves dropped by $5.69 billion to $634.58 billion as of week ending January 3, 2025, the Reserve Bank of India said on Friday. The reserves have been on a declining trend for the last few weeks.

Weekly Decline in Forex Reserves

The country’s forex reserves had dropped by $4.1 billion for the week ending December 27 and had settled at $640.27 billion. The decline has been attributed to revaluation and the Reserve Bank of India’s interventions in the foreign exchange market to curb rupee volatility.

According to news reports, the RBI often steps in to manage market liquidity, including selling dollars, to prevent a sharp decline in the rupee’s value.

Decline in Foreign Currency Assets

For the week ending January 3, foreign currency assets, which constitute a significant portion of the reserves, fell by $6.441 billion to $545.48 billion, according to data released on Friday.

In dollar terms, foreign currency assets account for the impact of fluctuations in the value of non-U.S. currencies, such as the euro, pound, and yen, held within the foreign exchange reserves.

Gold Reserves See Growth

Gold reserves rose by $824 million, reaching $67.092 billion during the week, according to the RBI.

The Special Drawing Rights (SDRs) declined by $58 million, totalling $17.815 billion, as reported by the central bank.

India’s reserve position with the IMF fell by $18 million, amounting to $4.199 billion for the week, the RBI data revealed.

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