India's foreign exchange reserves fell by $28.05 billion in the second half of the financial year 2021-22, according to the latest report released by the Reserve Bank of India (RBI).
The country's forex reserves decreased from $635.36 billion at the end of September 2021 to $607.31 billion at the end of March 2022, the RBI data shows.
The total foreign exchange assets stood at $540.72 billion as of March 31, 2022. Reserves in securities declined to $363.03 billion by March 2022 compared to $383.74 billion in September 2021, while reserves in deposits with other central banks & BIS - dropped to $140.54 billion in H2FY22 compared to $147.86 billion in the first six months for FY22.
Reserves in deposits with commercial banks overseas fell to $37.16 billion at the end of March 2022 compared with $42 billion at the end of September 2021.
Gold reserves were at $42.55 billion and Special Drawing Rights (SDRs) at $18.89 billion while Reserve Tranche Position (RTP) came in at $5.14 billion.
In value terms, the share of gold in the total foreign exchange reserves increased from about 5.88% at the end of September 2021 to about 7.01% at the end of March 2022.
As of March 2022, the Reserve Bank held 760.42 metric tonnes of gold (including gold deposits of 11.08 metric tonnes). While 453.52 metric tonnes of gold is held overseas in safe custody with the Bank of England and the Bank of International Settlements (BIS), 295.82 metric tonnes of gold is held domestically.
The Reserve Bank of India publishes half-yearly reports on management of foreign exchange reserves as part of its efforts towards enhanced transparency and levels of disclosure.
These reports are prepared half yearly with reference to the position at the end of March and end-September each year.
Although both US dollar and Euro are intervention currencies and the foreign currency assets (FCA) are maintained in major currencies, the foreign exchange reserves are denominated and expressed in US dollar terms.
Movements in the foreign currency assets occur mainly on account of purchase and sale of foreign exchange by the RBI, income arising out of the deployment of the foreign exchange reserves, external aid receipts of the central government and changes on account of revaluation of the assets.
On a balance of payments basis (i.e., excluding valuation effects), foreign exchange reserves increased by $63.5 billion during April-December 2021 as compared to $83.9 billion during April-December 2020, the report says.
Foreign exchange reserves in nominal terms (including valuation effects) increased by $56.6 billion during April-December 2021 as compared with $108.0 billion in the corresponding period of the preceding year, it adds.