Forex check: India’s reserves dip by $1.24 billion to $691.49 billion in May-end; RBI says buffer still strong

India’s foreign exchange reserves slipped by $1.24 billion to $691.49 billion in the week ending May 30, according to data released by the Reserve Bank of India on Friday. Despite the decline, the central bank said the reserve buffer remains robust.

“At $691.5 billion, the reserves are sufficient to cover 11 months of imports and about 96 per cent of outstanding external debt,” RBI Governor Sanjay Malhotra said while announcing the Monetary Policy Committee's decisions earlier in the day. The decline follows a sharp $6.99 billion rise in the previous week, with the overall reserves staying near the record high of $704.89 billion registered in September 2024, ANI reported. The central bank’s data showed foreign currency assets — the largest component of the reserves — fell to $584.22 billion, while gold holdings rose to $84.31 billion. The share of gold in the forex pool has nearly doubled since 2021, the RBI noted. India also held $18.57 billion in Special Drawing Rights and $4.39 billion in its reserve position with the IMF. Foreign exchange reserves are managed actively by the RBI to stabilise the rupee. The central bank typically buys dollars when the rupee strengthens and sells them to curb excessive depreciation