India's Forex Reserves Fell to Lowest Point in Over a Year Between May 18 and 22

New Delhi: India's foreign exchange reserves fell to its lowest in more than one year in the week that ended May 22. The $681.4 ​billion sign-off amount was significantly lower than the $688.89 billion ‌a week earlier, reports citing data of the Reserve Bank of India said.

Reuters reported that the $7.5 billion decline was largely due to a $4.5 -billion fall in the value of the ​central bank's gold holdings, week-on-week. Economic Times reports that gold reserves fell to $114.7 billion, while foreign currency assets decreased by $2.8 billion to $543 billion in the week.

Also to blame is the fact that the RBI has intervened to stop the rupee from slipping past the 97 mark against the dollar.

The rupee is Asia's worst-performing currency and had been declining well before the US-Israel war on Iran, which has further led to its downfall. On the week which ended on May 22, the rupee slid seriously close to the 97 mark, at 96.96 against the dollar.

The rupee has declined 4% since the war began. The war is now in its fourth month. Escalating energy prices come amidst foreign investment outflows, spelling distinct doom for India's macroeconomic outlook.

The Special Drawing Rights – supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund – were down by $77 million to $18.748 billion, the RBI also said. India's reserve position with the IMF was also down by $33 million to $4.818 billion at the end of the May 22 week.

Prime Minister Narendra Modi has made controversial public appeals to conserve forex by cutting down on foreign travel, limiting fuel use and refraining from gold buys for a year.

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