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India's foreign exchange reserves dropped sharply, by USD 9.809 billion in the week that ended January 2, to USD 686.801 billion, driven by a slump in both gold reserves and foreign currency assets, the Reserve Bank of India's latest 'Weekly Statistical Supplement' data showed.
Over the past few weeks, the forex kitty has been largely in an uptrend. The country's foreign exchange (forex) kitty has been hovering close to its all-time high of USD 704.89 billion, reached in September 2024. For the reported week (that ended January 2), India's foreign currency assets (FCA), the largest component of foreign exchange reserves, stood at USD 551.990 billion, down USD 7.622 billion. The RBI data showed that gold reserves currently stand at USD 111.262 billion, down USD 2.058 billion from the previous week. The price of the safe-haven asset gold has been on a sharp uptrend over recent months, perhaps amid heightened global uncertainties and robust investment demand. After the latest monetary policy review meeting in early December, the RBI had said that the country's foreign exchange reserves were sufficient to cover more than 11 months of merchandise imports. Overall, India's external sector remains resilient, and the RBI is confident it can comfortably meet external financing requirements. In 2025, the forex kitty has increased by about 56 billion, according to data. In 2024, reserves rose by just over USD 20 billion. In 2023, India added around USD 58 billion to its foreign exchange reserves, contrasting with a cumulative decline of USD 71 billion in 2022. 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 by managing liquidity, including selling dollars, to prevent a steep depreciation of the rupee. The RBI strategically buys dollars when the Rupee is strong and sells when it weakens. (ANI)
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