Forex fall: India’s reserve falls $9.81 billion to $686.80 billion; RBI data shows weekly decline

Foreign exchange reserves fell by $9.809 billion to $686.801 billion in the week ended January 2, data released by the Reserve Bank of India showed on Friday, PTI reported.The decline followed a rise of $3.293 billion in the previous reporting week, when the reserves had climbed to $696.61 billion. Foreign currency assets (FCA), the largest component of the reserves, dropped by $7.622 billion to $551.99 billion during the week, the central bank’s data showed. Expressed in dollar terms, FCA includes the impact of appreciation or depreciation of non-US currencies such as the euro, pound and yen held in the reserves.Gold reserves also declined, falling by $2.058 billion to $111.262 billion, according to the RBI.The country’s Special Drawing Rights (SDRs) with the International Monetary Fund were down by $25 million to $18.778 billion, while India’s reserve position with the IMF decreased by $105 million to $4.771 billion during the week, the data showed.Foreign exchange reserves serve as a safety net when external conditions turn adverse, whether due to higher crude prices, sharp currency swings or turbulence in global markets. They show how well a country can meet its import needs and step in to calm currency movements when required. In India, the Reserve Bank of India manages these reserves to support financial stability and confidence in the external sector. With its weekly forex data released every Friday, it offers a timely view of the country’s external position and import cover.