India's Forex Reserves Take a Hit

In a significant development, India's forex reserves have experienced a notable decrease of $1.8 billion, bringing the total to $638.7 billion as of the week ending February 28, according to the Reserve Bank of India (RBI). This decline follows a previous week's increase of $4.8 billion, showcasing the volatile nature of forex reserves.

Components of the Forex Reserves

Breaking down the components, foreign currency assets, which constitute a major part of the reserves, saw a reduction of $493 million, settling at $543.4 billion. This figure accounts for the fluctuations in non-US currencies such as the euro, pound, and yen held within the reserves.

Gold reserves also took a hit, decreasing by $1.3 billion to $73.3 billion. However, not all was gloomy as the Special Drawing Rights (SDRs) with the International Monetary Fund saw a slight increase of $27 million, reaching nearly $18 billion.

Historical Context

It's worth noting that the forex reserves had reached an all-time high of $704.9 billion at the end of September 2024, highlighting the significant fluctuations experienced over the months.

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