India’s foreign exchange reserves drop by $6.4 Billion

India’s foreign exchange reserves declined$6.4 billion to $675.65 billion from $682.13 billion as of November 8, as reported by the Reserve Bank of India (RBI) on Friday.
The forex kitty, which reached at record high of $704.885 billion at September’s end, have consistently declined over several weeks.
According to data released on Friday, the foreign currency assets, which constitute a significant portion of the reserves, reduced by USD 4.467 billion to USD 585.383 billion for the week ended November 8.
The foreign currency assets, when expressed in USD terms, reflect the impact of value changes in non-US currencies such as the euro, pound and yen that are part of the foreign exchange reserves.
Additionally, the central bank reported that gold reserves declined by USD 1.936 billion, reaching USD 67.814 billion during the week and Special Drawing Rights (SDRs) decreased by USD 60 million to USD 18.159 billion.
The data from the apex bank showed that India’s reserve position with the IMF reduced by USD 14 million to USD 4.298 billion in the reporting week.
However, India is at fourth position globally in foreign exchange reserves, following China, Japan, and Switzerland.
The RBI regularly engages in market operations through liquidity management, including dollar sales, to prevent sharp depreciation of the rupee. The central bank maintains vigilant oversight of foreign exchange markets, intervening solely to ensure orderly market conditions by managing excessive exchange rate volatility, without adhering to predetermined targets or bands.