India’s Forex Reserves Decline by $2 Billion,

India’s foreign exchange reserves have seen a reduction of $2 billion, bringing the total down to $646.67 billion as of May 24, according to the Reserve Bank of India’s recent Friday report.

In contrast, the previous week saw a significant increase in forex reserves by $4.54 billion, setting a new record high of $648.7 billion for the week ending May 17, 2024.

The RBI’s Weekly Statistical Supplement indicates that Foreign currency assets (FCAs) have fallen by $1.51 billion to $567.5 billion. The FCAs, which are valued in dollars, reflect the impact of the rise or fall of other currencies such as the euro, pound, and yen within the reserves.

Additionally, the gold reserves have decreased by $482 million to $56.71 billion, and Special Drawing Rights (SDRs) have dropped by $33 million to $18.12 billion.

The reserve position with the International Monetary Fund (IMF) has also experienced a slight decline of $1 million, now standing at $4.33 billion.

The RBI regularly engages in liquidity management, including the sale of dollars, as part of its market intervention strategy to prevent any sharp decline in the value of the rupee.

It is the RBI’s practice to closely watch the forex markets and step in to ensure that the market remains stable, curbing any undue fluctuations in the exchange rate, without adhering to a fixed target or range