India's forex reserves declined by $1.8 billion to $596 billion for the week that ended on May 6 on the back of a fall in the core currency assets, according to Reserve Bank of India (RBI) data released on Friday. In the previous reporting week, the overall reserves had declined by $2.7 billion to $598 billion, falling below the $600 billion mark.
At a time when the currency is under pressure due to heavy outflow by foreign investors, RBI is reportedly intervening across all markets to defend the currency. The foreign exchange reserves declined by $28 billion in the six months to March 2022. During the reporting week, the fall in the reserves was on account of a decline in the Foreign Currency Assets (FCA), a major component of the overall reserves, and gold reserves, as per RBI's weekly data.
Also read:
FCA dropped by $1.97 billion to $531 billion in the week under review. Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.
Gold reserves increased by $135 million to $42 billion in the reporting week, the data showed. The Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) jumped by $70 million to $18.4 billion.
The country's reserve position with the IMF decreased by $11 million to $4.99 billion in the reporting week, the data showed.
