India’s Forex Reserves Drop to $716.81 Billion Amid RBI Dollar Sales
India’s foreign exchange reserves declined to $716.81 billion in the week ending March 6, down from $728.49 billion the previous week, according to data released by the Reserve Bank of India (RBI) on Friday. The $11.68 billion fall comes as the central bank sold dollars in the market to support the rupee, which faced pressure from rising global oil prices and tensions linked to the Iran war.
Economists said the decline was driven by both intervention and valuation changes. Gaura Sen Gupta, economist at IDFC FIRST Bank, estimated that the RBI’s net dollar sales amounted to around $6.1 billion, while valuation losses contributed roughly $5.4 billion to the drop. She noted that the RBI offset the liquidity impact of these dollar sales by conducting on-screen bond purchases.
The bulk of the weekly decline came from foreign currency assets, which fell by $9.8 billion to $563.25 billion. Meanwhile, the value of gold reserves dropped by $1.6 billion to $130.02 billion. India’s reserves also include Special Drawing Rights (SDRs) worth $18.72 billion and a Reserve Tranche Position with the International Monetary Fund totaling $4.83 billion.
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