India's Forex Reserves Decline After 7-Week Rise Standing at $701 Billion as of October 4

India's Forex Reserves Decline After 7-Week Rise Standing at $701 Billion as of October 4

India’s foreign exchange reserves witnessed a decline for the first time in eight weeks, falling to $701.18 billion as of October 4, according to data released by the Reserve Bank of India (RBI). The reserves dropped by $3.71 billion after a seven-week streak of gains, which had boosted them by nearly $35 billion. In the week ending September 27, the reserves had reached an all-time high of $704.89 billion, with a rise of $12.6 billion, the largest weekly increase since mid-July 2023.

The changes in forex reserves are attributed to the RBI’s interventions in the foreign exchange market, as well as fluctuations in the value of foreign assets. The RBI actively intervenes to stabilize the rupee, preventing excessive volatility. During this reporting period, the Indian rupee experienced its worst performance since May, declining by 0.3% due to rising crude oil prices and increased equity outflows amid escalating tensions in the Middle East.

Traders confirmed that the RBI had intervened in both the non-deliverable forwards and local spot forex markets to keep the rupee from falling below the critical 84 per dollar mark. India’s forex reserves also include the country's reserve tranche position with the International Monetary Fund (IMF).