India’s foreign exchange reserves (Forex) declined by USD 5.008 billion to USD 588.314 billion in the week ended July 1, according to RBI data released on Friday.

In the previous week ended June 24, the reserves had increased by USD 2.734 billion to USD 593.323 billion. During the reporting week ended July 1, the fall in the foreign exchange reserves was due to a dip in Foreign Currency Assets (FCA), a major component of the overall reserves, and also in the gold reserves.

Foreign Currency Assets decreased by USD 4.471 billion to USD 524.745 billion in the week ended July 1, as per the Weekly Statistical Supplement, released by the RBI on Friday. Expressed in dollar terms, FCA includes the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.

Multi-currency assets held in multi-asset portfolios make up FCA (investment in securities, deposits with other central banks & BIS, and deposits with commercial banks overseas).

Two of the last three reserve items - gold (USD504 million decreased) and special drawing rights (USD77 million) - declined. The IMF's reserve position increased by USD44 million.

During the calendar year thus far, the reserves dwindled by USD 21.698 billion. Since March-end 2022 till date, the reserves have declined by USD 18.995 billion.

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