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India’s foreign exchange reserves recorded another dip for the week ending July 18, marking the third consecutive weekly fall, according to the latest figures from the Reserve Bank of India (RBI). The reserves dropped by $1.18 billion, bringing the total to $695.49 billion.

This follows a larger fall of $3.06 billion in the previous reporting week, which had pulled the total down to $696.67 billion, reported ANI.

Currency Assets Lead the Decline

The weekly drop was largely attributed to a fall in foreign currency assets, the largest component of the reserves, which slid by $1.201 billion, settling at $587.609 billion. These are influenced by changes in global currency movements as well as RBI’s interventions in the foreign exchange market.

Gold holdings, however, provided some cushion to the overall decline. After a sharp fall of $498 million in the prior week, gold reserves rebounded by $150 million, reaching $84.499 billion. Meanwhile, India’s Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) recorded another modest fall, dropping $119 million to $18.683 billion.

Strong Position Despite Weekly Losses

Despite recent weekly setbacks, India’s forex reserves remain robust. Governor Sanjay Malhotra recently highlighted that the reserves are sufficient to cover 11 months of imports and meet 96 per cent of the country’s external debt obligations.

In recent years, India has seen fluctuations in its reserves, adding $58 billion in 2023 after a $71 billion drop in 2022. In 2024, the reserves increased by over $20 billion, touching a record high of $704.885 billion in September.

The RBI actively manages forex reserves, frequently buying dollars when the rupee is strong and selling when the currency weakens to stabilise volatility. This tactical approach, combined with steady gold accumulation, underpins India’s long-term reserve strength, even amid short-term weekly swings.