India’s forex reserves decline to $635.72 billion, reversing a three-week gain streak, as the RBI steps in to stabilize the Rupee amid its depreciation against the US dollar.
New Delhi, February 23: India’s foreign exchange (forex) reserves declined by $2.54 billion in the week ending February 14, reversing a three-week upward trend, according to the latest Reserve Bank of India (RBI) data.
The country’s forex reserves now stand at $635.721 billion, following a rollercoaster movement after hitting an 11-month low in recent months.
“Reserves Now 10% Below Peak Amid RBI Intervention”
India’s forex reserves have fallen nearly 10% from their record high of $704.89 billion in September, with the latest decline likely attributed to RBI’s intervention to curb sharp Rupee depreciation.
The Indian Rupee is currently near its all-time low against the US dollar, prompting the central bank to sell dollars to stabilize the currency.
Breakdown of India’s Forex Reserves:
- Foreign Currency Assets (FCA): $539.591 billion (largest component of reserves)
- Gold Reserves: $74.150 billion
India’s Import Coverage & 2024 Forex Trends
Estimates indicate that India’s forex reserves are sufficient to cover 10-11 months of projected imports, providing a strong cushion against external economic shocks.
In 2023, India added approximately $58 billion to its reserves, marking a stark contrast to 2022, when reserves declined by $71 billion. In 2024, the reserves have already increased by $20 billion.
How RBI Manages Forex Reserves
Foreign exchange reserves are assets held by a country’s central bank, primarily in US dollars, with smaller portions in Euros, Japanese Yen, and Pound Sterling.
The RBI strategically manages liquidity—it buys dollars when the Rupee is strong and sells when it weakens—to prevent excessive volatility in currency markets.
As India continues to navigate global financial uncertainties, forex reserve management remains a key tool in maintaining economic stability and investor confidence.
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India forex reserves, RBI intervention, Indian Rupee depreciation, USD to INR, gold reserves, foreign currency assets, economic stability, forex market, import coverage, central bank reserves, currency exchange, RBI policy