Sharp Fall in India’s Forex Reserves, Down $40 Billion Since Iran War Began

India’s foreign exchange reserves dropped by USD 10.288 billion to USD 688.058 billion during the week ended March 27 , the Reserve Bank of India (RBI) reported on Friday. In the previous week, the reserves had declined by USD 11.413 billion to USD 698.346 billion.

The country’s forex reserves had reached an all-time high of USD 728.494 billion during the week ended February 27 , before the outbreak of the West Asia conflict , which has put the Indian rupee under pressure . In response, the RBI has been intervening in the forex market through dollar sales and adopting policy measures to curb the currency’s fall.

Breaking down the components, foreign currency assets (FCA) , the major part of the reserves, fell by USD 6.622 billion to USD 551.072 billion . These include holdings in euros, pounds, yen , and other non-US currencies, adjusted for their respective exchange rate movements.

The value of gold reserves also declined by USD 3.666 billion to USD 113.521 billion , reflecting global price movements. Special Drawing Rights (SDRs) increased marginally by USD 17 million to USD 18.649 billion , while India’s reserve position with the IMF fell by USD 17 million to USD 4.816 billion in the reporting week.

The RBI’s data indicate that the major drop in reserves is primarily due to the fall in foreign currency assets and gold , triggered by geopolitical tensions and the central bank’s efforts to stabilize the rupee .

As global uncertainty continues, India’s forex reserves remain a key buffer for the economy, helping to manage currency fluctuations and ensure financial stability.