India’s foreign exchange reserves fell by $1.237 billion to $691.485 billion for the week ending May 30, according to data released by the Reserve Bank of India (RBI) on Friday.
This decline followed a sharp increase of nearly $7 billion in the previous week, keeping the reserves close to the record high of $704.885 billion reached in September 2024.
The major component of the reserves, foreign currency assets, dropped by $1.952 billion to $584 billion. Meanwhile, gold reserves rose by $723 million to $84.305 billion.
Special Drawing Rights (SDRs) decreased slightly by $2 million to $18.569 billion, and India’s reserve position with the International Monetary Fund (IMF) fell by $6 million to $4.395 billion.
RBI Governor Sanjay Malhotra stated that despite the recent dip, the forex reserves remain strong. At $691.5 billion, they are sufficient to cover more than 11 months of imports and about 96 percent of India’s outstanding external debt.
The central bank actively manages these reserves to stabilize the rupee, buying dollars when the rupee strengthens and selling them to prevent excessive depreciation.
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