India’s foreign exchange reserves declined for the second consecutive week, falling by $7.51 billion to $681.38 billion for the week ending May 22, according to data released by the Reserve Bank of India (RBI). The drop comes after a $8.09-billion decline the previous week, raising concerns about sustained pressure on the country’s external buffers.
Foreign currency assets, the largest component of the reserves, fell by $2.87 billion to $543.03 billion during the week. Gold reserves recorded a sharper decline, dropping $4.53 billion to $114.78 billion. Special Drawing Rights edged lower by $76 million to $18.75 billion, while India’s reserve tranche position with the IMF declined by $32 million to $4.82 billion.
The back-to-back weekly declines have pulled total reserves down from a recent high of $728.49 billion recorded on February 27, just before the war in West Asia began, representing a cumulative erosion of roughly $47 billion over three months.
The drawdown is partly attributed to the RBI’s active intervention in currency markets to arrest the depreciation of the rupee, which has faced persistent pressure from a stronger dollar, global risk-off sentiment, and foreign portfolio outflows.
RBI Governor Sanjay Malhotra has maintained that the central bank’s intervention is aimed at curbing excessive volatility rather than defending any specific exchange rate level. Despite the interventions, the rupee has remained under pressure, edging closer to the psychological Rs 100-per dollar mark.
At $681 billion, reserves still cover approximately 10 months of projected imports, which analysts consider a comfortable buffer.
