India’s forex reserves drop $2.69 bn to $717 bn
India’s foreign exchange reserves fell by $2.691 billion to $717.056 billion in the week ended October 30, Reserve Bank of India data showed. Wires converged on the same drop, with the figure rounded to about $717 billion. It is the third straight weekly decline in the published readings, keeping the stockpile well below its early-October high of $726 billion.
Foreign currency assets, the largest item in the basket, slipped by $2.088 billion during the week, the Times of India reported. Gold holdings weakened as well, and the newspaper flagged both factors as the drivers of the fall. The foreign exchange reserves total eased from $719.75 billion a week earlier. Besides currency assets and gold, India’s reserves also include special drawing rights and its position in the IMF, though neither moved materially this week.
Three weeks, three declines
The week ended October 23 saw reserves fall $1.27 billion to $719.75 billion, according to CNBC-TV18. Bullion was the trigger there as well: gold lost $2.7 billion in value, more than cancelling out a $1.36 billion rise in dollar assets. Both CNBC-TV18 and Business Standard flagged gold’s sliding value as the principal cause.
Business Standard’s accounting for the same week came in marginally higher, at $1.3 billion, leaving the kitty at $719.8 billion. Its headline framed the move squarely as gold pulling the reserves down, a pattern that has now persisted for seven straight weeks as bullion prices drift lower.
The slide predates October’s middle weeks. In the period ended October 9, reserves tumbled $8.58 billion to $726.03 billion, marking a second consecutive weekly fall, CNBC-TV18 said. Together, the three most recent weekly prints have removed roughly $9 billion from the stockpile.
Why the reserves are shrinking
Economists attribute the decline to the deployment of FCNR(B) resources and RBI intervention in the foreign exchange market, Rediff.com reported. FCNR(B) is the route Indian banks use to hold foreign-currency deposits for non-resident Indians; when lenders redeploy or repay those funds, the outflow shows up as a cut in official reserves. Intervention, essentially the central bank selling dollars to steady the rupee, chips away at the stockpile in the same way.
Separately, the RBI has been reshaping the composition of its holdings, buying more gold while trimming exposure to United States Treasuries, News18 reported. That tilt makes India’s buffer less dependent on dollar-denominated paper, though it also means dips in gold prices now weigh more heavily on the weekly numbers.
Even after this month’s slide, India’s foreign exchange reserves remain among the world’s largest. The country crossed the $700 billion mark for the first time in September 2024, becoming just the fourth nation in the world with reserves above that level, the Hindustan Times reported. Analysts will parse the composition of the next print as closely as the headline number.
Based on reports from
- India's forex reserves dip by $2.69 billion: What's behind the decline? — The Times of India
- India’s forex reserves drop by USD 2.69 bn to USD 717 bn — ThePrint
- India's forex reserves drop by USD 2.69 bn to USD 717 bn — National Herald
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