forex reserves

Sitharaman also pointed out that apart from higher crude oil prices, fertiliser prices have reached “unimaginable” levels, while elevated gold prices are creating challenges on the external sector front.

India's economy faces pressure from the US-Iran conflict, impacting fuel prices, fertiliser subsidies, and forex reserves, Finance Minister Sitharaman warned. Meanwhile, West Bengal opened its first holding centre for suspected illegal Bangladeshi nationals. In Karnataka, a leadership decision for the Congress is imminent, while Iran demands $12 billion in frozen assets before US talks.

The Indian rupee strengthened significantly against the US dollar, closing at 95.26, driven by positive global sentiment surrounding a potential US-Iran peace deal and easing West Asian tensions. RBI Governor's assurance of orderly forex market movements and positive remarks on the rupee's valuation also boosted confidence.

The erosion in reserves reflects not only intervention by policymakers to support domestic currencies, but also valuation losses in non-dollar assets, according to data compiled by Bloomberg.

Economists believe India’s foreign-exchange reserves are still sufficiently strong to shield the rupee from the oil price shock triggered by the Iran conflict, with the country’s reserve buffers remaining far healthier than the levels seen during the 2013 taper tantrum.

With supply concerns mounting, crude oil prices have surged beyond the $100-per-barrel level, compared to nearly $70 before the conflict escalated. Brent crude, remaining above $111 per barrel, has triggered wider effects across fuel prices, currencies, trade activity, and financial markets.

India's foreign exchange reserves experienced a significant drop of $7.794 billion, reaching $690.693 billion in the week ending May 1. This decline, primarily driven by a fall in foreign currency assets and gold reserves, follows a previous decrease. The central bank's intervention in the forex market to support the rupee is a key factor behind this trend.

Finance minister Nirmala Sitharaman expressed openness to investor concerns regarding capital gains tax, assuring that the government will consider stakeholder suggestions. She also defended recent fuel price hikes, attributing them to global crude oil costs and highlighting the government's prior absorption of excise duties.

India’s gold imports hit a record $71.98 billion in 2025-26, rising over 24% from $58 billion a year earlier. This was largely due to skyrocketing global gold prices, which have bumped up the value of imported gold.

The CEA’s words could not be more direct and the situation the world’s sixth largest economy faces is by no means small. Several macroeconomic indicators are in focus; inflation, health of the current account, and the exchange rate.

Every Re 1 hike in petrol, diesel, CNG, and LPG costs feeds into inflationary pressures in the economy, and also indirectly impacts discretionary spending, hence hitting growth channels.

Rupee depreciation is not new, what is new however is the rapid pace at which it is falling. It’s the biggest risk for India’s external sector resilience at the moment. In just over a year, the rupee has depreciated over 14%.

Falling exchange rate can curb imports more effectively than austerity measures. Don't intervene in forex market