Big Worry for India as foreign exchange reserves decline continues, Pakistan is happy because its…

As per the data released by Reserve Bank Of India (RBI) the reserves has hit a Six-Month Low.

India’s foreign exchange reserves have declined for the second consecutive week. Excluding the last week of November, the reserves have been continuously falling over the past two and a half months. During the week ending December 13, 2024, the foreign exchange reserves experienced a significant drop of USD 1.9 billion. In contrast, neighbouring Pakistan’s foreign exchange reserves showed an increase during the same week.

Indian Foreign Exchange Reserves Hit Six-Month Low

As per the data released by the Reserve Bank Of India (RBI), the reserves have hit a Six-Month Low. Notably, the foreign exchange reserves of the country plunged to USD1.988 billion during the week ending December 13, 2024. A week earlier, there was a steep decline of USD 3.235 billion. Consequently, India’s foreign exchange reserves now stand at USD 652.869 billion. Over the past two and a half months, the only increase was witnessed in the week ending November 29, when reserves rose by USD 1.51 billion.

Before this, the reserves had been steadily decreasing for eight weeks. The highest-ever level of USD 704.885 billion was witnessed in the week ending September 27, 2024.

Sharp Decline in Foreign Currency Assets

As per weekly figures released by the RBI, there is a sharp decline in Foreign Currency Assets.

There was a significant drop in India’s foreign currency assets (FCAs) during the week under review. The FCAs decreased by USD 3.047 billion, bringing the total FCA reserves to USD 562.576 billion.

Notably, foreign currency assets include a significant portion of the country’s total foreign exchange reserves. These assets, expressed in US dollars, include the effects of fluctuations in non-US currencies like the euro, pound, and yen.

Increase In Gold Reserves

Increase in Gold Reserves India’s gold reserves increased over the past week. According to RBI, gold reserves rose by USD 1.121 billion during the week ending December 13, 2024, bringing the total gold reserves to USD 68.056 billion.

Decrease In SDRs

As per RBI data, there was a decrease in Special Drawing Rights (SDRs) during the past week. The SDRs dropped by USD 35 million, bringing the total to USD 17.997 billion. Additionally, the country’s reserve currency holdings with the International Monetary Fund (IMF) also saw a decline of USD 27 million, reducing it to USD 4.240 billion.

Increase In Pakistan’s Reserves

• Pakistan’s foreign exchange reserves have shown a steady increase over the past few months.
• There was a minor decline of $19.1 million in reserves for the week ending December 6, 2024.
• Following the decline, reserves increased by $31.8 million in the subsequent week.
• As of mid-December 2024, Pakistan’s total foreign exchange reserves reached $16.632 million.
• The central bank reported these fluctuations in the foreign exchange reserves.