India’s forex reserves snap three-week gaining streak, drop by $2.54 billion to

Snapping the three-week rising streak, India’s forex reserves dropped by USD 2.54 billion to USD 635.721 billion in the week ended February 14, the RBI said on Friday. In the previous reporting week, the reserves had increased by USD 7.654 billion to USD 638.261 billion.

The forex reserves had increased to an all-time high of USD 704.885 billion in September 2024. The forex kitty however declined thereafter due to forex market interventions by RBI to reduce volatility in the rupee.

For the week ended February 14, foreign currency assets, a major component of the reserves, decreased by USD 4.515 billion to USD 539.591 billion, the data released on Friday showed.

The rupee has been under pressure amid India’s sluggish economic growth, a recent interest rate cut, foreign outflows from local stocks and concerns of a global trade war following U.S. President Donald Trump’s tariff plans.

The intervention helped the rupee gain 0.7% during the reported week, the most since mid-July 2023. The domestic unit ended at 86.7125 against the dollar on Friday and was up 0.1% on week. Foreign exchange reserves include India’s Reserve Tranche position in the International Monetary Fund.

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, however, increased by USD 1.942 billion to USD 74.15 billion during the week, the RBI said. The Special Drawing Rights (SDRs) were up by USD 19 million to USD 17.897 billion. India’s reserve position with the IMF was up by USD 14 million at USD 4.083 billion in the reporting week, the data showed.