India Foreign Exchange Reserves Drop to $717 Billion

India's foreign exchange reserves decreased by $2.6 billion to $717 billion for the week ending October 30. This decline follows a period of significant volatility, with reserves reaching a peak of $785.7 billion in early September. That peak was largely driven by a special concessional swap scheme for diaspora deposits that generated nearly $133 billion.

The Reserve Bank of India attributed the current downward trend to the deployment of Foreign Currency Non-Resident (Bank) deposits and active market interventions. The central bank sold dollars to support the value of the rupee against external pressures.

The weekly drop was primarily led by a $2.08 billion decrease in foreign currency assets and a $559 million decline in gold reserves. Special Drawing Rights also fell by $47 million. Conversely, the reserve position with the International Monetary Fund saw a marginal increase of $3 million.