India’s foreign exchange reserves fell by USD 3.06 billion to USD 696.67 billion for the week ending July 11, marking the second consecutive week of decline, according to official data released by the Reserve Bank of India (RBI). In the previous reporting week ending July 4, the country’s forex reserves had slipped by USD 3.049 billion to USD 699.736 billion.
In the week ending July 11, foreign currency assets—the major component of forex reserves—fell by USD 2.477 billion to USD 588.81 billion, likely emerging as the primary reason behind the decline in total reserves. Gold reserves, another key component, also saw a sharp fall of USD 498 million, bringing them down to USD 84.348 billion.
The country’s Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) declined by USD 66 million to USD 18.802 billion during the reporting week, as per the RBI data. The Reserve Position in the IMF also decreased by USD 24 million.
Central banks worldwide are increasingly accumulating safe-haven gold in their foreign exchange reserves, and India is no exception. The share of gold maintained by the RBI in its forex reserves has nearly doubled since 2021.
In 2023, India added around USD 58 billion to its forex reserves, in contrast to a cumulative decline of USD 71 billion in 2022. In 2024, the reserves rose by a little over USD 20 billion, reaching an all-time high of USD 704.885 billion at the end of September.
India’s foreign exchange reserves are currently sufficient to cover 11 months of the country’s imports and about 96 per cent of its external debt, said Governor Sanjay Malhotra while announcing the outcome of the Monetary Policy Committee (MPC) decisions.
The RBI Governor expressed confidence, stating that India’s external sector remains resilient, with key vulnerability indicators showing improvement.
Foreign exchange reserves, or FX reserves, are assets held by a nation’s central bank or monetary authority, primarily in reserve currencies such as the US Dollar, with smaller portions in the Euro, Japanese Yen, and Pound Sterling.
The RBI often intervenes in the forex market to manage liquidity—selling dollars to prevent steep rupee depreciation and buying dollars when the rupee is strong.
