Forex reserves dip for second straight week; down by $4.3 bn

India’s foreign exchange (forex) reserves dipped by $4.34 billion to $589.13 billion for the week ended May 26, extending the losses to the second straight week due to a sharp drop in foreign currency assets, the Reserve Bank of India (RBI) data showed.

The country’s forex kitty has depleted by over $10 billion in the past two weeks for which the data has been released by the central bank. The forex reserves had declined by $6.052 billion during the week ended May 19 after touching near $600 billion mark in the previous week.

As per the weekly statistical supplement released by the RBI on Friday, the country’s foreign currency assets, the biggest component of the forex reserves, slumped by $4.01 billion to $520.93 billion during the week under review.

The foreign currency assets had declined by $4.65 billion during the week ended May 19.

Expressed in the US dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US currencies like pound, euro and yen held in the forex reserves.

The value of gold reserves dropped by $225 million to $44.90 billion during the week ended May 26. The value of gold reserves had declined by $1.22 billion in the previous week.

All major components of the country’s forex reserves declined during the week under review. India’s reserve position in the International Monetary Fund (IMF) dropped by $17 million to $5.11 billion. The Special Drawing Rights (SDRs) fell by $84 million to $18.19 billion.