India’s foreign exchange reserves fell by $8.4 billion to $644 billion in the week ended December 20, latest data released by the Reserve Bank of India (RBI) showed.

       Foreign exchange reserves are down by $61 billion since they hit an all-time high of $705 billion in the week ended September 27, 2024. The rupee has come under pressure since the end of September, prompting the central bank to intervene in the foreign exchange market through dollar sales. During the week ended December 20, the local currency depreciated by 0.25 per cent.

       The decline in reserves is due to both intervention and revaluation effects.

       Total reserves fell on the back of a decline in foreign currency assets, which dropped by $6 billion during the week.

       The reserves stood at $653 billion in the week ended December 13, having declined by $1.9 billion during that week.

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       Gold reserves declined by $2.3 billion in the previous week, data showed. Additionally, special drawing rights (SDRs) were down $112 million to $17.8 billion. India's reserve position with the International Monetary Fund (IMF) also fell by $23 million to $4.2 billion in the reporting week.

       The RBI has consistently maintained that it intervenes in the foreign exchange market to curb excess volatility in the exchange rate and does not target any particular level of the currency.

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