RBI Reports $4.9 Billion Drop in India Forex Reserves

India forex reserves :

India’s foreign exchange reserves fell sharply by $4.9 billion to reach $685.7 billion as of May 16, 2025, according to the latest data released by the Reserve Bank of India (RBI) on May 23. This drop follows a recent high of $690.6 billion recorded in the first week of May.

India forex reserves :

The drop is largely due to a sharp decline in gold reserves. India’s gold holdings went down by $5.12 billion, now standing at $81.2 billion compared to $86.33 billion earlier this month. Gold reserves can change due to various reasons such as international gold prices, economic concerns, or global political tensions.

Interestingly, while gold reserves declined, the country’s foreign currency assets saw a slight increase of $280 million. These assets include international currencies like the euro, pound, and yen. The overall value of these holdings depends on the exchange rates against the US dollar, which is the standard unit for reporting forex reserves.

In addition to gold and foreign currency, forex reserves also include Special Drawing Rights (SDRs) and the Reserve Position in the International Monetary Fund (IMF). SDRs fell by $42 million and now stand at $18.49 billion. The Reserve Position in the IMF also slightly dropped by $3 million to reach $4.371 billion.

The RBI uses foreign exchange reserves to manage currency value and ensure financial stability during uncertain times. For example, if the Indian Rupee weakens too much, the RBI can use these reserves to support the currency.

As of May 25, 2025, the Indian Rupee is trading at ₹85.17 per US dollar. The decline in reserves could be due to RBI interventions in the market to control currency fluctuations or external factors like changes in global trade or investment patterns.

India’s forex reserves are still strong but have seen a noticeable drop in May due to changes in gold value and global financial trends. The central bank continues to monitor and adjust its reserves to maintain stability.

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