After rising for two consecutive weeks, the country’s foreign exchange reserves declined by USD 306 million to USD 601.057 billion in the week ended June 3, according to RBI data.
After two consecutive weeks of increase, India’s foreign exchange (forex) reserves dropped by USD 306 million to USD 601.057 billion for the week ended June 3, as per Reserve Bank of India (RBI) data. The fall resulted from a sharp decline in the value of foreign currency assets.
The Reserve Bank of India has stated that India’s foreign currency assets, which are the biggest component of the forex reserves, have declined by USD 208 million. According to RBI’s weekly statistical supplement released on Friday, it stood at USD 536.779 billion for the week ended June 3. This comes after the foreign currency assets jumped by USD 3.610 billion in the previous week.
Expressed in US dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US currencies like the Euro, UK’s Pound Sterling, and Japanese Yen held in the foreign exchange reserves. Meanwhile, the value of gold reserves dipped by USD 74 million to USD 40.843 billion. The gold reserves’ value was also on the rise in the previous two weeks.
According to RBI data, the value of India’s Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) fell by USD 28 million to USD 18.410 billion during the week. However, the country’s reserve position in the IMF jumped by USD 5 million to USD 5.025 billion in the reporting week, as per the RBI.
Earlier on Friday, the US Treasury stated that the Indian economy has rebounded strongly despite facing three significant COVID-19 waves. Speaking about the country’s growth and impact of the pandemic, in its recent report to the US Congress, the Treasury Department said that India’s acute second wave weighed heavily on growth through the middle of 2021, delaying its economic recovery. “However, economic activity rebounded strongly in the second half of the year as India’s vaccination rollout accelerated,” the US Treasury said in its report.
Notably, the US treasury dept report points out that India has the fourth largest in terms of forex reserves at $569.9 billion as of December 2021, 18% of GDP.
India follows Switzerland which holds the third rank in terms of forex reserves at $1,033.8 billion and Japan which has the second-largest forex reserves at $1,283.3 billion. Meanwhile, China is at the top spot with forex reserves of $3,250.2 billion as of December 2021.
