forex reserves

India's foreign exchange reserves dropped by $7.511 billion to $681.384 billion in the week ending May 22, marking a second consecutive weekly decline. This decrease follows a significant fall in the previous week, with the reserves now under pressure due to the Middle East conflict and RBI's currency market interventions.

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.

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 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.

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.

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.

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%.

Acknowledging the impact of the West Asia crisis, the RBI has said that several factors will help India counter the negative effects and emerge strong.

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.

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

India has significantly increased import duties on gold and silver to 15% from 6%, aiming to curb rising imports and conserve foreign exchange amid the West Asia crisis. This move follows Prime Minister Modi's appeal for austerity and aims to ease pressure on the rupee and the country's balance of payments.

Ethanol-blended petrol is made by mixing ethanol with petrol. Ethanol is a biofuel that is derived from a wide variety of food crops and feed stocks like sugarcane and petrol. Under the Ethanol Blended Petrol Programme, the original target for achieving E20 petrol sales.

Cabinet also clears Rs 29,540 cr for infra, health, schemes

S&P Global has said that the country has adequate financial buffers to manage a wider current account deficit that could emerge because of rising crude oil prices. India’s current account deficit has narrowed over the past few years, although fluctuations in global crude prices now pose a risk to that improvement.