India's forex reserves fall most in over a year on central bank's rupee defence

Core Viewpoint - India's foreign exchange reserves decreased to $716.81 billion, reflecting a decline of $11.68 billion due to central bank interventions and external pressures [1] Group 1: Foreign Exchange Reserves - The decline in reserves was attributed to heavy dollar sales by the Reserve Bank of India (RBI) to support the rupee amid geopolitical tensions and rising oil prices [1] - The drop in reserves was also influenced by the increase in US yields and the strength of the dollar [1] Group 2: Breakdown of Reserves - The estimated net dollar sales by the RBI amounted to approximately $6.1 billion, alongside valuation losses of around $5.4 billion [2] - A significant portion of the decline in reserves was due to foreign currency assets, which fell by $9.8 billion, while gold reserves decreased by $1.6 billion [2] Group 3: Currency Valuation Effects - Changes in foreign currency assets reflect the impact of currency appreciation or depreciation of other currencies held in reserves [3] - Foreign exchange reserves also include India's Reserve Tranche position in the International Monetary Fund [3]