India's forex reserves fall $12.95 billion to $734.6 billion, fourth weekly drop
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India's forex reserves fell US$12.95 billion to US$734.6 billion in the week to 2 October 2026, RBI data showed on 9 October, a fourth straight weekly fall.
What Happened
India's foreign exchange reserves fell by US$12.952 billion to US$734.606 billion in the week ended Friday, 2 October 2026, according to weekly data released by the Reserve Bank of India (RBI) on Friday, 9 October 2026. It was the fourth weekly fall in a row. In the previous week, ended 25 September, reserves had dropped by US$18.343 billion to US$747.557 billion. Reserves are now about US$51 billion below their peak of 4 September, as the central bank has been selling dollars to steady the rupee while crude oil prices stay high.
Key Facts
- Total reserves: down US$12.952 billion to US$734.606 billion in the week ended 2 October.
- Foreign currency assets, the largest part of reserves, fell US$10.664 billion to US$604.747 billion.
- Gold reserves dropped US$2.288 billion to US$106.413 billion.
- Special Drawing Rights rose US$15 million to US$18.656 billion; the reserve position with the IMF fell US$15 million to US$4.789 billion.
- This was the fourth straight weekly decline, taking the fall from the 4 September peak to about US$51 billion.
- Compared with a year earlier, reserves are still higher by about US$34.6 billion.
Why It Matters
Foreign exchange reserves are the country's savings in foreign currency and gold. The RBI uses them to pay for imports in a crisis, to meet foreign debt, and to calm the currency market when the rupee falls too fast. A large weekly drop usually means two things at once: the RBI has sold dollars to support the rupee, and the value of its non-dollar holdings and gold has changed with global prices.
Economists quoted after the release split the recent decline between these two causes, though their estimates differ. One estimate is that the RBI may have sold about US$30 billion over the month, with the rest of the fall coming from valuation losses. Another economist put the RBI's dollar sales at about US$7.5 billion in the latest week, with the remainder from revaluation. Because the RBI does not publish its intervention data in real time, these figures are estimates rather than official numbers.
The pressure comes from high oil prices, which raise India's import bill and the demand for dollars. The rupee has been trading around 96 to 97 per dollar this week, closing near 96.78 on Wednesday, 7 October, the day of the RBI's policy decision. Even after the recent drop, reserves of more than US$730 billion are higher than a year ago, which gives the RBI room to keep acting if needed.
| Component | Change in week to 2 Oct | Level (US$ billion) |
|---|---|---|
| Foreign currency assets | -10.664 | 604.747 |
| Gold | -2.288 | 106.413 |
| Special Drawing Rights | +0.015 | 18.656 |
| Reserve position with IMF | -0.015 | 4.789 |
| Total | -12.952 | 734.606 |
Impact
Short-term: Falling reserves show the RBI is actively defending the rupee. Traders will watch the next weekly releases and oil prices to judge how long the central bank keeps selling dollars.
Long-term: If oil stays high and dollar outflows continue, the RBI may lean more on interest rates and other tools rather than reserves alone, which can mean costlier loans for businesses and households.
Who is affected: Importers and exporters, companies with foreign currency loans, students and travellers paying abroad, and investors in Indian markets.
Key Takeaway
India's reserves fell for a fourth week to US$734.6 billion in the week ended 2 October 2026, about US$51 billion below their September peak, as the RBI supports the rupee against high oil prices.
Questions and Answers
How much did India's forex reserves fall in the latest week?
They fell by US$12.952 billion to US$734.606 billion in the week ended 2 October 2026, according to RBI data released on 9 October.
Why are India's reserves falling?
Analysts link the fall to the RBI selling dollars to support the rupee amid high crude oil prices, along with valuation losses on gold and non-dollar assets. Estimates of the exact split differ.
Are India's reserves still at a comfortable level?
They remain large. At about US$734.6 billion, reserves are still about US$34.6 billion higher than a year earlier, even after a month of declines.
What part of the reserves fell the most?
Foreign currency assets, which fell by US$10.664 billion. Gold holdings fell by US$2.288 billion.
Sourced and fact-checked by the Peepals Global Editorial Team
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Reported, fact-checked and published by the Peepals Global Editorial Team.
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