India's forex reserves drop by USD 2.69 bn to USD 717 bn

• Forex reserves fall $2.691 billion to $717.056 billion, extending the decline from September's record high.

• RBI's dollar sales to defend the rupee and deployment of FCNR(B) resources contribute to the drawdown.

• Rupee rebounds on 6 November as crude prices ease and foreign investment flows return.

India's foreign exchange reserves declined by $2.691 billion to $717.056 billion in the week ended 30 October, extending a downward trend as the Reserve Bank of India (RBI) continues to use its dollar reserves to contain pressure on the rupee.

The latest decline follows a fall of $1.269 billion in the preceding week, when the reserves stood at $719.748 billion. The country's forex kitty has shed nearly $68.65 billion since touching an all-time high of $785.706 billion in the week ended 4 September.

The sustained drawdown comes amid pressure on the Indian currency, which has faced depreciation risks from foreign investor outflows, elevated crude oil prices and persistent demand for dollars. The RBI has been selling dollars in the foreign exchange market to support the rupee and curb excessive volatility. While such intervention helps meet dollar demand and prevent disorderly movements in the exchange rate, it also draws down the country's foreign currency assets.

The central bank's intervention has become an important part of its efforts to shore up the rupee, particularly as capital outflows and a higher import bill have added to the demand for dollars. Experts have also attributed the decline in reserves to the deployment of funds mobilised through the special foreign currency non-resident (FCNR-B) deposit swap facility.

The reserves had surged to a record high in September following substantial foreign currency inflows through the concessional swap scheme for diaspora deposits, under which banks mobilised a record $13.3 billion.

The pressure on the rupee has also prompted the RBI to deploy additional measures to manage dollar demand. However, sustained intervention comes with a cost, making the rebuilding of foreign exchange reserves and the revival of foreign capital inflows important to maintaining confidence in the currency.

The rupee, meanwhile, staged a recovery on Friday, 6 November, closing at Rs 93.905 against the US dollar — its strongest level since 22 April. Falling crude oil prices and renewed foreign portfolio investment inflows supported the recovery. The currency, however, remains down around 4.5 per cent against the dollar in 2026.

According to data released by the RBI on Friday, foreign currency assets, the largest component of India's forex reserves, declined by $2.088 billion to $591.118 billion during the week ended 30 October.

Expressed in dollar terms, foreign currency assets account for the impact of appreciation or depreciation in other currencies, including the euro, pound and yen, held as part of the country's foreign exchange reserves.

The value of gold reserves fell by $559 million to $102.591 billion during the week, while Special Drawing Rights (SDRs) declined by $47 million to $18.558 billion.

India's reserve position with the International Monetary Fund (IMF), however, increased by $3 million to $4.79 billion, the RBI said.

With PTI inputs