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India's Forex Reserves Plunge $9.8 Billion in Early January

India's foreign exchange reserves fell sharply by $9.809 billion in the week ending January 2, 2025, bringing the total to $686.801 billion. The decline was driven by significant drops in both foreign currency assets and gold reserves. Despite the weekly decrease, the Reserve Bank of India states the reserves are sufficient to cover more than 11 months of merchandise imports, indicating a resilient external sector. The RBI actively manages these reserves, buying and selling dollars to stabilize the rupee.

Key Points: India's Forex Reserves Drop $9.8 Billion in a Week

  • Sharp $9.8 billion weekly decline
  • Gold reserves down $2.1 billion
  • Foreign currency assets drop $7.6 billion
  • Reserves remain resilient covering 11+ months of imports
2 min read

India forex reserves fall sharp $9.8 billion in week that ended Jan 2

India's foreign exchange reserves fell sharply by $9.8 billion to $686.8 billion, driven by declines in foreign currency assets and gold holdings.

"India's foreign exchange reserves were sufficient to cover more than 11 months of merchandise imports. - Reserve Bank of India"

New Delhi, January 11

India's foreign exchange reserves dropped sharply, by USD 9.809 billion in the week that ended January 2, to USD 686.801 billion, driven by a slump in both gold reserves and foreign currency assets, the Reserve Bank of India's latest 'Weekly Statistical Supplement' data showed.

Over the past few weeks, the forex kitty has been largely in an uptrend.

The country's foreign exchange (forex) kitty has been hovering close to its all-time high of USD 704.89 billion, reached in September 2024.

For the reported week (that ended January 2), India's foreign currency assets (FCA), the largest component of foreign exchange reserves, stood at USD 551.990 billion, down USD 7.622 billion.

The RBI data showed that gold reserves currently stand at USD 111.262 billion, down USD 2.058 billion from the previous week.

The price of the safe-haven asset gold has been on a sharp uptrend over recent months, perhaps amid heightened global uncertainties and robust investment demand.

After the latest monetary policy review meeting in early December, the RBI had said that the country's foreign exchange reserves were sufficient to cover more than 11 months of merchandise imports.

Overall, India's external sector remains resilient, and the RBI is confident it can comfortably meet external financing requirements.

In 2025, the forex kitty has increased by about 56 billion, according to data.

In 2024, reserves rose by just over USD 20 billion.

In 2023, India added around USD 58 billion to its foreign exchange reserves, contrasting with a cumulative decline of USD 71 billion in 2022.

Foreign exchange reserves, or FX reserves, are assets held by a nation's central bank or monetary authority, primarily in reserve currencies such as the US dollar, with smaller portions in the Euro, Japanese Yen, and Pound Sterling.

The RBI often intervenes by managing liquidity, including selling dollars, to prevent a steep depreciation of the rupee. The RBI strategically buys dollars when the Rupee is strong and sells when it weakens.

- ANI

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Reader Comments

P
Priya S
The headline is a bit alarming, but the article gives the full picture. Reserves go up and down based on RBI's market operations to stabilize the rupee. The fact that we added $56 billion in 2025 so far is the bigger story! 🇮🇳
R
Rohit P
While the RBI's confidence is reassuring, I wish there was more clarity for common people on *why* such a sharp drop happened in that specific week. Was it due to supporting the rupee, or something else? A little more transparency would ease public concern.
S
Sarah B
Watching from abroad, India's forex management seems robust. The strategic buying and selling of dollars to manage the currency's value is a standard, smart practice. The reserves are still at very healthy levels compared to many emerging economies.
V
Vikram M
The drop in gold reserves value is interesting. Gold prices have been soaring globally, so a $2 billion drop suggests the RBI might have sold some physical gold, not just a valuation change. Maybe they're rebalancing the portfolio? Smart move if true.
K
Kavya N
As someone who follows economics, this weekly data is very volatile. You have to look at the quarterly or yearly trend. We've come a long way from the 1991 crisis. Our forex chest is our national security blanket, and it's in safe hands with the RBI.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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