India's forex reserves fall $18.3 bn, post biggest weekly decline on record

Foreign exchange reserves have fallen for three straight weeks, losing about $38.2 billion, as the RBI intervenes to support the rupee amid higher crude oil prices

India's foreign exchange reserves declined by $18.3 billion to $747.6 billion during the week ended September 25, the biggest weekly fall on record, according to data compiled by Bloomberg. The latest data was released by the Reserve Bank of India (RBI) on Friday.

 

The total reserves stood at $765.9 billion in the previous week ended September 18, when they had fallen by $14.9 billion, the sharpest decline since November 2024. 

After hitting all time high of $785.7 billion during the week ended September 4 2026, foreign exchange reserves fell $38.1 billion in the next three weeks.

 

Foreign currency assets (FCAs), the largest component of the reserves, declined by $15.6 billion to $615.4 billion during the reported week. FCAs, expressed in dollar terms, include the effect of appreciation or depreciation of non-US currencies such as the euro, pound and yen held in the reserves.

 

 

The fall in reserves comes after a sharp rise in the earlier weeks, with reserves having touched a record $785.7 billion during the week ended September 4. Reserves have now declined for a third straight week, losing about $38.2 billion in total, as the RBI stepped in to support the rupee amid higher crude oil prices.

 

Gold reserves declined by $2.6 billion to $108.7 billion during the reported week, while special drawing rights (SDRs) fell by $97 million to $18.6 billion. India's reserve position with the International Monetary Fund (IMF) declined by $86 million to $4.8 billion, the RBI data showed.

 

The decline in reserves comes as the rupee remains under pressure amid higher crude oil prices and US Treasury yields, prompting the RBI to intervene in the foreign exchange market. The rupee depreciated 0.5 per cent to 96.31 per dollar on Thursday, while Brent crude crossed $100 a barrel and the US 10-year Treasury yield rose to 5.34 per cent, its highest level since 2002.

 

The RBI has been intervening in the foreign exchange market through both spot and forward transactions to contain excessive volatility in the rupee.

 

The central bank had also used dollar-rupee sell/buy swaps as part of its intervention strategy, which helped replenish reserves earlier while absorbing excess rupee liquidity from the banking system.

 

The latest decline follows a sharp recovery in reserves after they had fallen to $666.9 billion in the week ended June 26, as the RBI intervened in the foreign exchange market through dollar sales amid the West Asia crisis. The FCNR(B) swap window, which mobilised $143.6 billion in foreign currency inflows until September 18, has contributed significantly to the subsequent rise in reserves.