Winning Bizness Desk

Mumbai. India has seen a major drop in its foreign exchange reserves for the second week in a row. Over the last two weeks, the reserves have fallen by more than $6 billion, which equals around ₹53,000 crore. Experts say this is mainly due to the rising strength of the US dollar and a weakening Indian rupee. With the rupee crossing 86 per dollar, the pressure on reserves may continue in the coming weeks.

US Trade Tensions Add to Pressure

One of the reasons behind the falling rupee is the ongoing delay in a trade deal between India and the US. Adding to this is America’s warning of imposing tariffs on BRICS nations, including India. To manage the situation, India’s central bank has been selling dollars in the market to support the rupee, which is further depleting the forex reserves.

Islamabad Celebrates a Gain

While India is struggling, neighbouring Pakistan is witnessing a rise in its forex reserves. Pakistan’s reserves went up by over $20 million recently. This increase has taken the country’s total liquid foreign exchange reserves to nearly $20 billion. The contrast between India’s drop and Pakistan’s gain has led to celebration in Islamabad.

RBI Confirms Two-Week Slide

As per the Reserve Bank of India (RBI), India’s foreign reserves fell by $3.06 billion in the week ending July 11, bringing the total to $696.67 billion. A week before that, the reserves had dropped by $3.05 billion, falling to $699.74 billion. This marks a total fall of $6.11 billion in two weeks. This is a sharp fall compared to the peak of $704.88 billion at the end of September 2024.

Gold and Other Assets Also Declined

Not just the currency reserves, India’s gold reserve also took a hit. The value of gold reserves dropped by $498 million, now standing at $84.35 billion. Foreign currency assets fell by $2.48 billion to $588.81 billion. Special Drawing Rights (SDRs) from the IMF also dropped by $66 million. India’s IMF reserve holding decreased by $24 million to $4.71 billion.

Pakistan’s Reserves Climb Steadily

Pakistan’s central bank has reported a $23 million rise in its reserves. This has taken the State Bank of Pakistan’s forex to $14.53 billion. Commercial banks in Pakistan hold an additional $5.43 billion, bringing the total liquid reserves of the country to nearly $20 billion. Compared to India’s fall, Pakistan’s slight but steady gain stands out in the current economic scenario.

7 Key Pointers at a Glance

• India’s forex reserves fell by over $6 billion in two weeks.
• This equals a loss of around ₹53,000 crore.
• Dollar strength and rupee weakness are key reasons.
• RBI is selling dollars to protect the rupee.
• Gold, SDRs, and IMF reserves have also fallen.
• India’s reserves now stand at $696.67 billion.
• Pakistan’s forex reserves have risen to nearly $20 billion.