India's Forex Reserves Drop | 29 Apr 2024

India's forex reserves fell by USD 2.282 billion to USD 640.334 billion in the week ending 19th April 2024, as per the Reserve Bank of India (RBI).

Components of Reserves:
- Foreign currency assets decreased by USD 3.793 billion to USD 560.86 billion.
- Gold reserves increased by USD 1.01 billion to USD 56.808 billion.
- Special Drawing Rights (SDRs) decreased by USD 43 million to USD 18.034 billion.
- Reserve position with the International Monetary Fund (IMF) declined by USD 2 million to USD 4.631 billion.
Factors Influencing Decline:
- This decrease was primarily attributed to strategic interventions by the central bank, which deployed the reserves to defend the rupee amidst economic uncertainties and currency depreciation.
- The RBI intervenes in the market to manage liquidity, including selling dollars to prevent sharp rupee depreciation and prevent excessive volatility in the exchange rate.
It can be noted that in April 2024, India's forex kitty had reached an all-time high of USD 645.6 billion.