February 21st 2025.
In a turn of events, India's forex reserves have taken a dip after three consecutive weeks of growth. The Reserve Bank of India (RBI) announced on Friday that the reserves have decreased by USD 2.54 billion, bringing the total to USD 635.721 billion for the week ending on February 14.
To put things into perspective, the previous week had seen a significant increase of USD 7.654 billion, taking the reserves up to USD 638.261 billion. This was the highest amount recorded since September 2024, when the reserves reached an all-time high of USD 704.885 billion. However, the RBI's interventions in the forex market to stabilize the rupee caused a decline in the reserves.
A major contributor to the decrease in reserves was the foreign currency assets, which saw a decline of USD 4.515 billion to USD 539.591 billion for the week ending on February 14. This includes the impact of currency fluctuations for non-US units such as the euro, pound, and yen that are held in the reserves.
On a positive note, the gold reserves saw an increase of USD 1.942 billion, reaching a total of USD 74.15 billion. The Special Drawing Rights also experienced a slight increase of USD 19 million, bringing the total to USD 17.897 billion. Additionally, India's reserve position with the International Monetary Fund (IMF) increased by USD 14 million to USD 4.083 billion during the reporting week.
This information comes from data released by the RBI on Friday. The overall decrease in reserves may raise concerns, but experts believe it is a result of the RBI's efforts to maintain stability in the forex market. India's forex reserves still remain at a comfortable level, providing a cushion for any future economic challenges.
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