Forex Reserves Decline for the Week Ended June 26
India's foreign exchange reserves decreased by $5.654 billion to reach $666.933 billion for the week ended June 26, according to data released by the Reserve Bank of India (RBI) on Friday. This marks a reversal from the previous week when reserves had increased by $963 million to $672.587 billion.
The reserves had hit an all-time high of $728.494 billion during the week ended February 27 this year, before the onset of the West Asia conflict. Since then, the rupee has come under pressure, prompting the RBI to intervene in the forex market through dollar sales.
Prime Minister's Appeal to Conserve Forex
Prime Minister Narendra Modi has made multiple public appeals starting May 11, urging citizens to conserve foreign exchange by reducing foreign travel, limiting fuel use, and refraining from gold purchases for a year. These measures aim to support the rupee and stabilize the forex reserves.
Components of the Decline
Foreign currency assets, a major component of the reserves, decreased by $150 million to $541.067 billion during the week ended June 26. These assets, expressed in dollar terms, include the effects of appreciation or depreciation of non-US units such as the euro, pound, and yen held in foreign exchange reserves.
The value of gold reserves saw a significant drop of $5.394 billion, falling to $102.536 billion during the week, the RBI stated. Additionally, the special drawing rights (SDRs) declined by $89 million to $18.558 billion. India's reserve position with the International Monetary Fund (IMF) also decreased by $21 million to $4.772 billion at the end of the reporting week, according to the central bank's data.
