India's Forex Reserves Take a Hit

India's foreign exchange reserves have seen a significant decrease, dropping by $4.112 billion to $640.279 billion for the week ending December 27, as reported by the Reserve Bank of India (RBI) on Friday. This decline follows a previous drop of $8.478 billion, bringing the total to $644.391 billion, as recorded in the week ending on December 20.

Consistent Decrease in Reserves

Recent weeks have shown a consistent decrease in reserves, primarily due to revaluation and RBI's interventions in the forex market to stabilize rupee fluctuations. The reserves had previously reached their peak at $704.885 billion towards the end of September.

Impact on Foreign Currency Assets

According to the data released, foreign currency assets, which constitute a major portion of the reserves, decreased by $4.641 billion to $551.921 billion for the week ending on December 27. The foreign currency assets, when expressed in dollar terms, reflect the impact of value changes in non-US currencies such as the euro, pound, and yen that are held within the foreign exchange reserves.

Gold Reserves and SDRs

During this period, gold reserves showed an increase of $541 million, reaching $66.268 billion, and Special Drawing Rights (SDRs) decreased by $12 million to $17.873 billion, according to RBI. The apex bank's data indicated that India's reserve position with the IMF remained steady at $4.217 billion during the reporting week.