India's forex reserves drop by $7.28 billion — biggest weekly fall in over 6 months

Parallelly, gold reserves experienced a dip of $515 million, landing at $43.824 billion. Further, data from the RBI revealed that special drawing rights (SDRs) also faced a decrease of $119 million, falling to $18.205 billion.

Similarly, India's position in the International Monetary Fund (IMF) saw a decline of $51 million, at $50.72 billion.

In October 2021, India's foreign exchange reserves had reached a record-breaking high of $645 billion. However, the trajectory has been downward recently due to the central bank's deployment of the forex kitty to bolster the Indian rupee in response to global pressures.

The RBI periodically intervenes in the market by managing liquidity, including the sale of dollars, to avert any abrupt depreciation in the rupee's value. This proactive approach by the RBI entails vigilant monitoring of the foreign exchange markets.

The central bank's intervention is aimed at preserving orderly market conditions by mitigating excessive volatility in exchange rates, and this is executed without being tied to predetermined target levels or bands.