India's forex reserves declined by $1.774 billion to $595.954 billion for the week ended May 6 on the back of a fall in the core currency assets, according to Reserve Bank of India (RBI) data released on Friday. In the previous reporting week, the overall reserves had declined by $2.695 billion to $597.728 billion, falling below the $600 billion mark.
At a time when the currency is under pressure due to heavy outflow by foreign investors, RBI is reportedly intervening across all markets to defend the currency. The foreign exchange reserves declined by $28.05 billion in the six months to March 2022.
During the reporting week, the fall in the reserves was on account of a decline in the Foreign Currency Assets (FCA), a major component of the overall reserves, and gold reserves, as per RBI's weekly data.
FCA dropped by $1.968 billion to $530.855 billion in the week ended May 6. Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound, and yen held in the foreign exchange reserves.
Gold reserves increased by $135 million to $41.739 billion in the reporting week, the data showed. The Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) jumped by $70 million to $18.370 billion.