India's Forex Reserves Dip by Nearly $7 Billion to $695.4 Billion

Economy

1st November 2025, 2:21 AM

India's Forex Reserves Dip by Nearly $7 Billion to $695.4 Billion

▶

Short Description :

India's foreign exchange reserves saw a significant drop of nearly $7 billion, falling to $695.4 billion for the week ending October 24, according to Reserve Bank of India data. The previous week, reserves had reached an all-time high of $702.3 billion. This decline was spread across foreign currency assets, gold holdings, Special Drawing Rights (SDRs), and the reserve position with the IMF.

Detailed Coverage :

India's foreign exchange reserves experienced a notable decrease of $6.9 billion, bringing the total reserves down to $695.4 billion for the week that concluded on October 24. This follows a record-setting week prior, where the reserves had peaked at $702.3 billion.

The dip in overall reserves is attributed to reductions in key components: * Foreign currency assets, the largest part, decreased by $3.9 billion to $566.5 billion. * The value of gold holdings fell by $3 billion, reaching $105.5 billion. * Special Drawing Rights (SDRs) saw a reduction of nearly $58 million, now standing at $18.7 billion. * The reserve position with the International Monetary Fund (IMF) also decreased slightly by $6 million to $4.6 billion.

In recent times, the value of gold in India's forex reserves has grown substantially, crossing the 15% mark of the total figure due to rising global gold prices.

Impact A substantial decline in forex reserves can signal that the central bank might be intervening in the currency market to manage exchange rate volatility or to meet external payment obligations. This can affect the value of the Indian Rupee against other currencies, influence interest rates, and impact overall investor sentiment towards the Indian economy. A steady or growing reserve is generally seen as a sign of economic stability. Rating: 7/10

Difficult Terms: Foreign Exchange Reserves: These are assets held by a country's central bank in foreign currencies and other assets like gold, used to back liabilities and influence monetary policy. Foreign Currency Assets: This component primarily consists of holdings of US dollars, Euros, British Pounds, Japanese Yen, and other major foreign currencies. Special Drawing Rights (SDRs): An international reserve asset created by the International Monetary Fund (IMF) to supplement its member countries' official reserves. Reserve Position with IMF: This represents a country's financial relationship with the IMF, including its quota and any lending to the IMF.