India's forex reserves fall USD 7.5 billion, down over USD 47 billion from February peak

India's foreign exchange reserves fell by USD 7.51 billion to USD 681.38 billion for the week ended May 22, dragged lower by declines in both gold holdings and foreign currency assets, data released by the Reserve Bank of India showed on Friday.

The reserves had stood at USD 688.89 billion a week earlier.

Foreign currency assets, the largest component of the reserves, dropped by USD 2.87 billion to USD 543.03 billion during the week, while gold reserves declined by USD 4.53 billion to USD 114.79 billion.

Expressed in dollar terms, FCAs include the effect of appreciation or depreciation of non-US currencies such as the euro, pound and yen held in the foreign exchange reserves.

India's holdings of Special Drawing Rights (SDRs) fell by USD 77 million to USD 18.75 billion, and its reserve position with the International Monetary Fund declined by USD 33 million to USD 4.82 billion.

On a year-on-year basis, the country's foreign exchange reserves were lower by USD 11.34 billion.

The country's foreign exchange reserves have fallen by more than USD 47 billion from a record high of USD 728.49 billion reached in late February.

The decline comes amid heightened volatility in global energy markets following the outbreak of conflict in West Asia earlier this year and disruptions to shipping through the Strait of Hormuz.

The situation has increased pressure on oil-importing economies, including India.

Prime Minister Narendra Modi has appealed to households to postpone gold purchases and cut discretionary foreign exchange spending to help the country cope with higher oil and fertiliser costs.

RBI data showed aggregate deposits of scheduled commercial banks rose 12.2% year-on-year to ₹256.89 lakh crore as of May 15, while bank credit expanded 16.2% to ₹211.87 lakh crore.

On a fortnightly basis, however, aggregate deposits declined by ₹1.8 lakh crore, or 0.7%, while bank credit contracted marginally by ₹23,807 crore.