India’s Forex Reserves Fall $11.41 Billion to $698.35 Billion on Gold Valuation Drop

Overview

• India’s reserve pile slipped by $11.413 billion to $698.346 billion in the latest week as the dollar value of gold holdings fell by $13.495 billion to $117.19 billion, according to RBI data.
• Foreign currency assets, which include dollars and other major currencies, rose by $2.13 billion to $557.69 billion, while Special Drawing Rights fell by $65 million and the IMF reserve position rose by $19 million.
• From a record $728.49 billion in late February, total reserves have now dropped for three straight weeks, declining by $30.14 billion over that stretch.
• The weekly figures reflect valuation effects, since reserves are reported in dollars and can swing when gold prices move or when the euro, yen, and pound change value against the dollar.
• Economists say the RBI’s large net short position in rupee forward contracts could tighten how much of the reserves are readily usable as the rupee weakens this month.