India’s forex reserves fall by $8 billion to $688.9 billion

India’s foreign exchange reserves declined by $8.094 billion to $688.894 billion in the week ended May 15, according to data released by the Reserve Bank of India on Friday.

The sharp fall comes after the country’s forex kitty had risen by $6.295 billion to $696.988 billion in the previous week ended May 8.

India’s reserves had earlier touched a record high of $728.494 billion in the week ended February 27. However, reserves have come under pressure in recent weeks amid volatility triggered by the ongoing Middle East conflict, which weakened the rupee and prompted the RBI to intervene in the foreign exchange market through dollar sales.

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Prime Minister Narendra Modi has also urged citizens since May 11 to help conserve foreign exchange by reducing non-essential foreign travel, limiting fuel consumption and avoiding gold purchases for a year.

According to RBI data, foreign currency assets — the largest component of forex reserves — dropped by $6.483 billion to $545.904 billion during the reporting week.

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

Gold reserves also declined by $1.536 billion to $119.317 billion during the week.

Meanwhile, Special Drawing Rights (SDRs) with the International Monetary Fund fell by $49 million to $18.824 billion.

India’s reserve position with the IMF also slipped by $25 million to $4.85 billion during the reporting week, the central bank data showed.