forex reserves

The erosion in reserves reflects not only intervention by policymakers to support domestic currencies, but also valuation losses in non-dollar assets, according to data compiled by Bloomberg.

Economists believe India’s foreign-exchange reserves are still sufficiently strong to shield the rupee from the oil price shock triggered by the Iran conflict, with the country’s reserve buffers remaining far healthier than the levels seen during the 2013 taper tantrum.

India's foreign exchange reserves experienced a significant drop of $7.794 billion, reaching $690.693 billion in the week ending May 1. This decline, primarily driven by a fall in foreign currency assets and gold reserves, follows a previous decrease. The central bank's intervention in the forex market to support the rupee is a key factor behind this trend.

With supply concerns mounting, crude oil prices have surged beyond the $100-per-barrel level, compared to nearly $70 before the conflict escalated. Brent crude, remaining above $111 per barrel, has triggered wider effects across fuel prices, currencies, trade activity, and financial markets.

India’s gold imports hit a record $71.98 billion in 2025-26, rising over 24% from $58 billion a year earlier. This was largely due to skyrocketing global gold prices, which have bumped up the value of imported gold.

The CEA’s words could not be more direct and the situation the world’s sixth largest economy faces is by no means small. Several macroeconomic indicators are in focus; inflation, health of the current account, and the exchange rate.

Falling exchange rate can curb imports more effectively than austerity measures. Don't intervene in forex market

India has significantly increased import duties on gold and silver to 15% from 6%, aiming to curb rising imports and conserve foreign exchange amid the West Asia crisis. This move follows Prime Minister Modi's appeal for austerity and aims to ease pressure on the rupee and the country's balance of payments.

Rupee depreciation is not new, what is new however is the rapid pace at which it is falling. It’s the biggest risk for India’s external sector resilience at the moment. In just over a year, the rupee has depreciated over 14%.

Cabinet also clears Rs 29,540 cr for infra, health, schemes

S&P Global has said that the country has adequate financial buffers to manage a wider current account deficit that could emerge because of rising crude oil prices. India’s current account deficit has narrowed over the past few years, although fluctuations in global crude prices now pose a risk to that improvement.