India Foreign Exchange Reserves Drop $14.9 Billion

The Reserve Bank of India reported that foreign exchange reserves fell by $14.881 billion to $765.901 billion for the week ending September 18. This represents the sharpest weekly decline since November 15, 2024, and follows a previous weekly drop of $4.924 billion. The decline comes shortly after reserves reached a record high of $785.7 billion on September 5.

Foreign currency assets drove the majority of the decrease, falling by $14.816 billion to $630.980 billion. An economist from IDFC FIRST Bank attributed $10.9 billion of this drop to actual dollar sales, with the remaining balance resulting from revaluation losses. Special Drawing Rights also decreased by $106 million to $18.739 billion, while India's reserve position with the International Monetary Fund held steady at $4.89 billion.

Gold reserves provided a slight offset, increasing by $68 million to $111.292 billion. The central bank has utilized spot and forward transactions to stabilize the rupee, which has faced pressure from crude oil prices exceeding $105 per barrel and US Treasury yields rising above 5%.