India’s foreign exchange reserves fell by nearly $2 billion to an almost six-month low of $652.87 billion as of Dec. 13, data from the Reserve Bank of India (RBI) showed on Friday.

The reserves had declined by $3.2 billion in the week of Dec. 6, and have declined by $52 billion from the record high of $704.89 billion hit on Sept. 27.

Changes in foreign currency assets are caused by the central bank’s intervention in the forex market as well as the appreciation or depreciation of foreign assets held in the reserves.

The RBI intervenes on both sides of the forex market to curb undue volatility in the rupee.

Last week, the rupee declined to its then all-time low of 84.88, pressured by weakness in the yuan and persistently strong dollar bids in the non-deliverable forwards market. The currency fell 0.1% last week.

India’s forex reserves drop to over five-month low

The domestic unit ended at 85.0150 on Friday, down for a seventh consecutive week. It hit a record low of 85.10 earlier in the day, after a hawkish turn in the Federal Reserve’s future outlook on policy rates.

The forex reserves also include India’s reserve tranche position in the International Monetary Fund.

Foreign exchange reserves (in million US dollars)--------------------------------------------------                             Dec 13       Dec 06                              2024         2024--------------------------------------------------Foreign currency assets      562,576      565,623Gold                          68,056       66,936SDRs                          17,997       18,031Reserve Tranche Position       4,240        4,266--------------------------------------------------Total                        652,869      654,857--------------------------------------------------