India’s foreign exchange reserves fell by $4.1 billion to $640.28 billion as of December 27, 2024, marking a significant dip driven by a reduction in Foreign Currency Assets (FCAs). Despite this decline, India remains the fourth-largest holder of forex reserves globally.
The drop in reserves is attributed to global market volatility, rising crude oil prices, and outflows from foreign portfolio investments. However, gold reserves increased by $541 million during the same period, providing some relief.
India’s forex reserves serve as a critical buffer against external shocks, and the Reserve Bank of India (RBI) continues to monitor global developments to ensure stability.
