India's Forex Reserves Experience Notable Decline amid Market Volatility

India's forex reserves saw a significant drop of USD 8.714 billion to USD 625.871 billion in the week ended January 10. The decline follows previous reductions and is attributed to currency revaluation and the Reserve Bank of India's market interventions. Gold reserves increased, while Special Drawing Rights and IMF reserves slightly decreased.

In a concerning development for India's financial stability, the nation's forex reserves plummeted by USD 8.714 billion to USD 625.871 billion during the week ending January 10, according to recent figures from the Reserve Bank of India (RBI).

This notable decline follows a reduction of USD 5.693 billion the previous week, marking a downward trend attributed to currency revaluation efforts and strategic interventions by the RBI aimed at curbing rupee volatility. Notably, forex reserves had attained a remarkable peak of USD 704.885 billion just a few months ago in end-September.

Breaking down the numbers further, foreign currency assets, a significant portion of these reserves, saw a decrease of USD 9.469 billion, landing at USD 536.011 billion. However, there was a positive uptick in gold reserves, rising by USD 792 million to USD 67.883 billion. Meanwhile, the Special Drawing Rights and India's reserve position with the IMF witnessed slight downturns, drawing attention to ongoing financial challenges.

(With inputs from agencies.)