India's forex reserves dip by $2.69 billion: What's behind the decline?

Forex reserves shrink in October

NEW DELHI: India's foreign exchange reserves took a hit in the week ended October 30, falling by $2.691 billion to $717.056 billion, according to the latest data released by the Reserve Bank of India (RBI) on Friday.The decline was largely driven by a drop in two key components of the country's reserves, foreign currency assets and gold holdings, which together make up the bulk of the forex kitty.While foreign currency assets and gold reserves fell, India's reserve position with the International Monetary Fund (IMF) recorded a marginal increase.Special Drawing Rights (SDRs), meanwhile, also saw a decline during the week.Foreign currency assets, the biggest part of India's foreign exchange reserves, declined by $2.088 billion to $591.118 billion during the reporting week.Gold reserves also fell by $559 million, taking their value to $102.591 billion.The decline was not limited to these two components. India's SDR holdings, which are reserve assets allocated by the IMF, dropped by $47 million to $18.558 billion.However, the country's reserve position with the IMF increased by $3 million to $4.790 billion.

The fall in reserves was also visible in their rupee value. India's total foreign exchange reserves stood at Rs 68.09 lakh crore as of October 30, marking a decline of Rs 24,777 crore from the previous week.Despite the latest weekly decline, India's foreign exchange reserves remain higher than their levels at the end of March 2026.Since the end of March, the country's reserves have increased by $25.949 billion. In rupee terms, the increase during this period stood at Rs 2.55 lakh crore.A year-on-year comparison shows that India's foreign exchange reserves have increased by $27.324 billion, or Rs 6.86 lakh crore.Foreign currency assets registered the biggest increase among the reserve components, rising by $26.527 billion over the year. Gold reserves also increased by $865 million.On the other hand, SDR holdings declined by $87 million during the same period. India's reserve position with the IMF recorded an increase of $18 million.While the latest data shows a weekly decline in the country's foreign exchange reserves, the overall reserve position remains higher than both its end-March 2026 level and its level a year ago.