India's Forex Reserves Plunge Nearly $10 Billion, Slip Below $672 Billion on Gold Reserve Rout

India's foreign exchange reserves declined by USD 9.985 billion to USD 671.625 billion in the week ended June 12, primarily due to a steep fall in the value of the country's gold reserves, according to data released by the Reserve Bank of India (RBI) on Friday.

The latest decline follows a drop of USD 711 million in the previous reporting week, when the reserves stood at USD 681.610 billion .

Despite the overall fall, foreign currency assets (FCA) , the largest component of India's forex reserves, increased by USD 846 million to USD 544.290 billion during the week. Foreign currency assets reflect the valuation of non-US currencies such as the euro, pound sterling, and Japanese yen held in the reserve basket.

The sharp decline in overall reserves was driven by a significant reduction in gold reserves , which fell by USD 10.754 billion to USD 103.821 billion . The drop is largely attributed to changes in global gold prices and valuation effects.

Meanwhile, the country's Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) declined by USD 66 million to USD 18.699 billion .

India's reserve position with the IMF also edged lower by USD 11 million , reaching USD 4.815 billion during the reporting week.

Foreign exchange reserves serve as a crucial buffer against external economic shocks and help maintain stability in the currency market. Despite the recent decline, India's reserve stockpile remains among the largest globally, providing substantial support for external sector resilience.