Forex reserves fall for 4th straight week; dip by $1.15 billion

Agencies | | Updated on: Jul 30, 2022

Capital shock India’s forex reserves have an in-built fragility | Photo Credit: WhiteLacePhotography

Forex reserves declined during the week ended July 22 only because of the drop in foreign currency assets

Extending the loss to the fourth straight week India's foreign exchange (forex) reserves fell by $1.152 billion to $571.56 billion for the week ended July 22, the lowest level in more than 20 months, the Reserve Bank of India data showed.

The country's forex reserves have declined by nearly $17 billion in four weeks. The decline was recorded in the forex reserves during the week when the rupee breached the psychologically important 80 per dollar mark for the first time ever.

India's foreign exchange (forex) reserves declined by $7.541 billion during the week ended July 15 and by $8.062 billion in the previous week.

Drop in foreign currency assets

According to the Reserve Bank of India's weekly statistical supplement, the forex reserves declined during the week ended July 22 only because of the drop in foreign currency assets. All other components of the forex reserves registered gains during the week. India's foreign currency assets, which are the biggest component of the forex reserves, fell by $1.426 billion to $510.136 billion during the week ended July 22. The foreign currency assets had declined by $6.527 billion during the week ended July 15 and by $6.656 billion in the previous week.

Expressed in US dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-dollar currencies like Euro, UK's Pound Sterling and Japanese Yen held in the foreign exchange reserves. There was an increase in other components of the forex reserves.

The value of gold reserves rose by $145 million to $38.502 billion during the week ended July 22. The value of India's Special Drawing Rights (SDRs) with the International Monetary Fund rose by $106 million to $17.963 billion during the week, the RBI data showed.

India's reserve position in the International Monetary Fund (IMF) rose by $23 million to $4.96 billion during the week ended July 22, as per the RBI Weekly Statistical Supplement.

Published on July 30, 2022
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