India's Forex Reserves Fall by USD 5.65 Billion to USD 666.93 Billion as Gold Holdings See Sharp Decline

India's foreign exchange reserves declined by USD 5.654 billion to USD 666.933 billion for the week ended June 26 , according to the latest data released by the Reserve Bank of India (RBI) on Friday. The decline comes just a week after the country's forex reserves had registered a modest increase of USD 963 million , reaching USD 672.587 billion .

The latest fall was largely driven by a significant decline in the value of the country's gold reserves , although other components of the reserve basket also recorded marginal decreases during the reporting week.

According to the RBI, foreign currency assets (FCAs) , which constitute the largest share of India's foreign exchange reserves, edged down by USD 150 million to USD 541.067 billion . These assets are influenced not only by the RBI's foreign exchange operations but also by fluctuations in the value of major global currencies such as the euro , British pound , and Japanese yen against the US dollar.

The most notable decline came from gold reserves , whose value dropped by USD 5.394 billion to USD 102.536 billion . Gold has emerged as an increasingly important component of India's reserve portfolio in recent years, and changes in international bullion prices often have a substantial impact on the overall reserve position.

Meanwhile, the country's Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) fell by USD 89 million to USD 18.558 billion . India's reserve position with the IMF also declined marginally by USD 21 million , settling at USD 4.772 billion during the week.

India's foreign exchange reserves had climbed to a record high of USD 728.494 billion in the week ended February 27 . However, the reserves have since witnessed periods of decline following heightened geopolitical tensions in West Asia , which put pressure on the rupee and prompted the RBI to intervene in the foreign exchange market through dollar sales to help maintain currency stability.