The decline in foreign currency assets and gold reserves led to a decrease in foreign exchange reserves for the week ended November 26.
Decline in foreign exchange reserves
There has been a decline in India’s foreign exchange reserves. According to the data released by the Reserve Bank, the country’s foreign exchange reserves have fallen below the level of $ 640 billion in the week ended November 26. This fall in currency reserves has been recorded due to the fall in foreign currency assets and gold reserves.
Where did India’s foreign exchange reserves reach
According to the data released by the Reserve Bank, India’s foreign exchange reserves fell by $ 2.71 billion to $ 637.68 billion in the week ended November 26. Before this, in the week ended November 19, the currency reserves were at the level of $ 640.41 billion. The main reason for the fall in foreign exchange reserves has been the fall in foreign currency assets. During the week, foreign currency assets fell by $ 1.04 billion to a level of $ 574.66 billion. Along with this, there has also been a decline in the gold reserve during the week. During the week, the country’s gold reserve fell by $ 1.56 billion to reach the level of $ 38.82 billion. With this, special drawing rights with the IMF fell by $ 74 million to a level of $ 19 billion. The country’s reserve position with the IMF has also seen a decline during this week and it has reached the level of $ 5.16 billion with a decrease of $ 25 million.
Stocks increased rapidly during Kovid
Even though there has been a decline in the latest figures of the country’s foreign reserves, the reserves are still at their high levels. The country’s foreign exchange reserves have seen a sharp increase during Kovid. In the week ending September 3, 2021, the country’s foreign exchange reserves had reached an all-time high of $ 642.453 billion. At present, the stock remains close to these levels. The country’s current reserves are sufficient to meet the import needs of more than one and a half years. Many big broking agencies around the world have described India’s high currency reserves as a big security amid the pressure of Kovid. Amidst the pressure in the economies, forex reserves were also an important reason for India’s rating not being affected. In the year 2004, India’s foreign exchange reserves crossed the $100 billion mark for the first time, while in the first week of June 2020, the foreign exchange reserves crossed the $ 500 billion level. Forex reserves have remained consistently above the $500 billion level since June