Forex reserves drop $7 bn to $709.75 bn on fall in foreign currency assets

Reserves decline driven by fall in foreign currency assets, while gold holdings rise marginally; analysts expect pressure to persist amid geopolitical tensions and outflows

India’s foreign exchange reserves fell by $7.05 billion to $709.75 billion during the week ended March 13, the latest data from the Reserve Bank of India (RBI) showed.

 

The total reserves contracted due to a fall in foreign currency assets, which declined by $7.67 billion during the reported week. Meanwhile, gold reserves rose marginally to $130.68 billion during the period.

 

Foreign currency assets have fallen by $9.54 billion in the current financial year so far, even as total reserves increased by around $45 billion, mainly due to a rise in gold prices.

 

Foreign currency assets, expressed in dollar terms, reflect the impact of appreciation or depreciation in non-US currencies, such as the euro, pound sterling, and yen, held as part of foreign exchange reserves.

 

The Special Drawing Rights were down $23 million at $18.69 billion during the reported week. India’s reserve position with the International Monetary Fund was also down by $15 million at $4.8 billion.

 

Gaura Sengupta, chief economist, IDFC First Bank, said, “RBI did net dollar selling in the spot market of about $6 billion during that week, and the remainder was due to revaluation loss.”

 

“Going forward, I think the pressure on forex reserves will continue since the war and the uncertainty are still there. FPI outflows in March were already around $10 billion and net dollar sales by the central bank were around $12 billion after accounting for all the buy/sell swaps being done,” she added.

 

In the previous reporting week, the total reserves had dropped $11.7 billion to $716.81 billion. Reserves touched an all-time high of $728.5 billion for the week ended 27 February, 2026.

 

For the week ended March 13, the rupee fell 0.77 per cent due to a rise in crude oil prices amid the ongoing geopolitical tensions in West Asia.

 

“As long as the current conflict persists, pressure is expected to continue, and the RBI will keep stepping in to reduce volatility. As a result, downward pressure on foreign exchange reserves is likely to persist in the coming days,” said Sakshi Gupta, principal economist, HDFC Bank.