The country’s foreign exchange reserves declined by $28.05 billion to $607.31 billion at the end of March this year from $635.36 billion at the end of September 2021, according to an RBI report.
Reserve Bank of India (RBI) 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 every six months with reference to the position as on March and September-end each year. The present report, which is the 38th in the series, is with reference to the position as at end-March 2022.
“During the half-year period under review, reserves decreased from $635.36 billion as at end September 2021 to $607.31 billion as at end-March 2022,” the Reserve Bank of India (RBI) said in the report released on Thursday.
Although both the U.S. dollar and the Euro are intervention currencies and the Foreign Currency Assets (FCA) are maintained in major currencies, the foreign exchange reserves are denominated and expressed in U.S. dollar terms.
Movements in the FCA occur mainly on account of purchase and sale of foreign exchange by 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.
The net forward asset (receivable) of RBI in the domestic foreign exchange market stood at $65.79 billion at the end of March 2022.
At the end of December 2021, foreign exchange reserves’ cover of imports (on balance of payments basis) declined to 13.1 months from 14.6 months at end-September 2021.
As of end-March 2022, the RBI held 760.42 metric tonnes of gold (including gold deposits of 11.08 metric tonnes), the central bank said.
While 453.52 metric tonnes of gold is held overseas in safe custody with the Bank of England and the Bank for International Settlements (BIS), 295.82 metric tonnes of gold is held domestically.
In value terms, the share of gold in the total foreign exchange reserves increased from about 5.88% as at end-September 2021 to about 7.01% as at end-March 2022, it said.
Of the total FCA of $540.72 billion in March, $363.03 billion was invested in securities, $140.54 billion was deposited with other central banks and the BIS, and the balance $37.16 billion comprised deposits with commercial banks overseas.
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