Archive · 6 Oct 2026
India’s Reserves Fall Sharply as Rupee Faces Pressure
India has a large reserve of money and other assets that can help during difficult times.
The reserve total fell by $18.3 billion in one week, after also falling the week before.
India’s currency, the rupee, is under pressure.
More expensive oil means India needs more dollars, and higher US interest rates can attract investors toward dollar assets.
Some of the reported fall can also happen when the value of other currencies or gold changes.
The central bank can use reserves to smooth sudden movements, but it cannot make the causes of the pressure disappear.
The article says India still has a strong cushion, so this is not described as a crisis.
It is a warning to watch how quickly the cushion is being used.
Foreign exchange reserves fell by $18.3 billion in the week ended September 25, to $747.6 billion.
The decline followed a $14.88 billion reduction in the preceding week.
Pressure on the rupee is linked to higher crude-oil prices, elevated US Treasury yields and turmoil in West Asia.
Currency and gold valuation changes can affect reported reserves, so the full decline does not necessarily represent direct intervention.
The article says reserves remain substantial, but policymakers should monitor the pace of their use and avoid treating them as an inexhaustible defence.
- Who
- India and the Reserve Bank of India (RBI).
- What
- Foreign exchange reserves fell by $18.3 billion to $747.6 billion, amid pressure on the rupee.
- When
- In the week ended September 25, following a $14.88 billion decline in the preceding week; the year is not stated.
- Where
- India.
- Why
- The article links rupee pressure to higher crude-oil prices, elevated US Treasury yields and turmoil in West Asia; currency and gold valuation changes may also affect reported reserve totals.
Use reserves to smooth currency moves
Allow adjustment rather than defend a level
How the RBI should respond to rupee pressure
Use reserves to smooth currency moves
The reserve cushion can be used to prevent disorderly movements in the rupee and provide time during external shocks.
Allow adjustment rather than defend a level
Trying to resist every downward movement could use reserves without removing the underlying pressures, and some rupee adjustment may be unavoidable.
How to interpret the reserve decline
Use reserves to smooth currency moves
The decline is a warning to monitor how quickly reserves are being used, especially while the rupee faces sustained pressure.
Allow adjustment rather than defend a level
The full $18.3 billion decline should not be treated as direct intervention, because exchange-rate and gold valuation changes can alter the reported total.
- Reserves after latest decline
- $747.6 billion
- Latest weekly decline
- $18.3 billion in the week ended September 25
- Previous weekly decline
- $14.88 billion
- Factors cited
- Higher crude-oil prices, elevated US Treasury yields and turmoil in West Asia
- Reserve valuation
- Changes in the value of non-dollar currencies and gold can alter the reported total.
- Policy consideration
- The RBI can use reserves to limit disorderly currency movements, but the article says defending a particular exchange-rate level indefinitely is not the objective.