India's forex reserves fall to over one-year low as central bank mounts rupee defence

A cashier holds Indian currency notes at a fuel station in Ahmedabad, India, May 20, 2026. REUTERS

India's foreign exchange reserves fell to a more than one-year low of $681.4 billion in the week ended May 22, from $688.89 billion ‌a week earlier, the Reserve Bank of India (RBI) data showed on Friday.

The $7.5 billion decline was largely due to a $4.5 billion fall in the value of the central bank's gold holdings, week-on-week.

The value of the RBI's foreign currency assets also shrunk by nearly $3 billion to $543 billion.

Changes in foreign currency assets, expressed in dollar terms, include the effect of appreciation or depreciation of other currencies in the reserves.

The RBI has been selling dollars to defend the beleaguered rupee, which has declined 4% since the US-Iran war began, as surging energy ‌prices sparked capital outflows and clouded India's macroeconomic outlook.

In the week to which the data pertains, the rupee slid to a record low of 96.96 per dollar before being shored up by firm RBI intervention over multiple trading sessions, including likely on Friday.

It ended the session at 95 per dollar, up 0.7% week-on-week. Foreign exchange reserves include India's Reserve Tranche position in the International Monetary Fund.

FOREIGN EXCHANGE RESERVES (in million US dollars)

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May 22 May 15

2026 2026

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Foreign currency assets 543,032 545,904

Gold 114,786 119,317

SDRs 18,748 18,824

Reserve Tranche Position 4,818 4,850

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Total 681,384 688,894