India’s forex reserves dip $ 5.7 billion in a week up to January 03

India’s forex reserves contracted by $5.7 billion during the week ended January 3 as foreign investors continued to pull out dollars from the Indian markets. Also, the dollar strength is leading to revaluation of non-dollar assets in the reserves.

India’s foreign exchange reserves are at $634.6 billion as of January 03. While foreign currency assets, the major component of India’s reserves dipped by $ 6.4 billion billion to 545.5billion, the value of gold in reserves was up by $824 million during the week to $67.1 billion.

Gold is emerging as an important source of foreign exchange reserves in the recent past as it is gaining in value due to both central bank’s purchases as well as due to price rise in the yellow metal. RBI’s gold holdings are at 876 tonnes as of November 29.

In the other developments reported in the WSS, banking lending rose at a faster pace than deposits in the last fortnight of 2024. While bank credit was up 11.2 percent year-on-year, deposits rose 9.8 percent as of December 27. The incremental credit deposit ratio amounted to 82.5 percent (If we include the merger impact of HDFC with HDFc Bank) compared to 72.5 percent in the same period a year ago.