The forex reserves changed the trajectory after increasing significantly by $3.293 billion to $696.61 billion in the week ending December 26, according to data shared by central bank in the last week of December.
Foreign currency assets (FCAs), the largest component of the reserves, fell by $7.622 billion, standing at $551.99 billion, the data showed.
Expressed in dollar terms, the foreign currency assets include the effects of appreciation or depreciation of non-US units, such as the euro, pound, and yen, held in the foreign exchange reserves.
Gold reserves, too, decreased by $2.058 billion during the week to $111.262 billion.
India’s Special Drawing Rights (SDRs) with the International Monetary Fund dropped by $25 million to $18.778 billion, while the country’s reserve position in the IMF decreased by $105 million to $4.771 billion as of December 26.
The Reserve Bank of India keeps a close watch on movements in the foreign exchange market and steps in when required to ensure orderly market conditions. These interventions are intended to curb excessive volatility in the rupee and are not anchored to any predetermined exchange rate level or range.