India’s forex reserves fall $5 billion to $721.02 billion as of October 16

The reserves touched an all-time high of $785.706 billion for the week ended September 4, driven by heavy greenback inflow as part of a special concessional swap for deposits from the diaspora through which banks raised a record nearly $133 billion but have been on a declining trend ever since.

Experts attribute the sharp decline in the kitty to deployment of FCNR(B) resources and currency defence put up by the RBI through dollar sales.

For the week ended October 16, foreign currency assets, a major component of reserves, decreased by $5.758 billion to $591.847 billion, according to the data released by the Reserve Bank of India (RBI).

Expressed in dollar terms, the foreign currency assets include effects of appreciation or depreciation of non-US units, such as the euro, pound, and yen, held in foreign exchange reserves.

The value of gold reserves rose $706 million to $105.8 billion during the week, the central bank said.

The Special Drawing Rights (SDRs) were up by $30 million to $18.578 billion, it added.

India's reserve position with the IMF increased by $11 million to $4.791 billion.