May 9, 2025 – India has recorded a notable dip in its foreign exchange (forex) reserves, marking the first weekly decline after an uninterrupted eight-week upward trend.
According to the latest data released by the Reserve Bank of India (RBI), the country’s forex reserves fell by $2.07 billion, bringing the total to $686.06 billion for the week ending May 2, 2025.
The weekly bulletin issued by the Reserve Bank of India confirmed the decline, which comes amid fluctuating global market dynamics and adjustments in India’s external assets. The drop in forex reserves was primarily driven by a significant fall in gold holdings, even though foreign currency assets posted a modest gain.
Reserve Bank of India said foreign currency assets, the largest component of India’s forex reserves, rose by $514 million to stand at $581.177 billion, reflecting minor inflows and valuation effects due to exchange rate fluctuations. However, this gain was offset by a sharp fall in gold reserves, which decreased by $2.545 billion, now standing at $81.820 billion, according to Reserve Bank of India.
In addition, Reserve Bank of India said that special drawing rights (SDRs) with the International Monetary Fund (IMF) fell by $30 million, reaching $18.558 billion. Meanwhile, the country’s reserve position at the IMF also recorded a marginal drop of $3 million, now totaling $4.509 billion.
The decline in forex reserves comes at a time when global financial markets remain volatile, with rising oil prices and shifting investor sentiment influencing capital flows in and out of emerging markets like India. Analysts suggest that temporary rebalancing of reserve components, particularly gold, and Special Drawing Right (SDR) adjustments have contributed to this week’s fall.
The rupee closed at 85.37 per dollar on Friday, down 0.9% on the week on the back of depreciation pressure sparked by the conflict between India and Pakistan.