India's forex reserves shed $60 billion in six weeks as RBI steps in to support rupee, one of Asia's worst-performing currencies this year
Economic Times 1 hr ago·16 Oct 2026, 12:17 pm
India's foreign exchange reserves have dropped by nearly $60 billion in just six weeks, reaching a level of $726 billion. This sharp decline is primarily driven by the Reserve Bank of India's active intervention in the currency market to stabilize the rupee. The central bank is selling dollars to prevent the rupee from weakening further against the US dollar, a move that naturally depletes the country's foreign currency holdings.
For investors, this development signals that the RBI is prioritizing currency stability over accumulating reserves. While a healthy reserve buffer is crucial for financial security, this level of depletion suggests the central bank is using its resources to manage volatility. It reflects broader global headwinds, including higher US interest rates and rising crude oil prices, which are putting pressure on emerging market currencies like the rupee.
Moving forward, investors should monitor the RBI's intervention strategy. If the rupee continues to face pressure, further reserve sales could be on the horizon. Additionally, tracking global interest rate trends and crude oil prices will be key to understanding the sustainability of the current support measures.
Excerpt from Economic Times
India’s foreign exchange reserves declined by nearly $60 billion in six weeks to $726.027 billion as of October 9, from a record high of $785.706 billion on September 4. The fall was largely attributed to the Reserve Bank of India’s intervention to support the rupee amid rising crude oil prices, higher US yields and…Read the original at Economic Times
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