India’s foreign exchange reserves declined sharply in the first reporting week of the year, reflecting pressures across key components of the country’s external buffer.
The reserves fell by $9.809 billion to $686.801 billion in the week ended January 2, the Reserve Bank of India (RBI) said on Friday. This came after a rise of $3.293 billion in the previous week, when the reserves had climbed to $696.61 billion.
Foreign currency assets (FCAs), which form the largest share of the reserves, saw the biggest fall. For the week ended January 2, FCAs decreased by $7.622 billion to $551.99 billion, RBI data showed.
“Expressed in dollar terms, the foreign currency assets include the effects of appreciation or depreciation of non-US units, such as the euro, pound, and yen, held in the foreign exchange reserves.”
Gold holdings also registered a decline during the week. The value of gold reserves dropped by $2.058 billion to $111.262 billion, according to the central bank.
Other components of the reserves showed marginal movement. The Special Drawing Rights (SDRs) were down by $25 million to $18.778 billion, the RBI said. India’s reserve position with the International Monetary Fund (IMF) also fell, dropping by $105 million to $4.771 billion in the reporting week.