India Forex Reserves Extend Plunge to 10-Month Low

Foreign exchange reserves held by the Reserve Bank of India slumped to an equivalent of $625 billion in the second week of 2025, the lowest since March 2024, and extending the aggressive decline from the record high of $704.9 billion in the last week of September.

The quick depletion of Indian forex reserves reflected the increasing extent of forex sales that the RBI is forced to undertake to hold its crawling peg of the currency.

Despite the depletion, the currency continued to extend fresh record lows as slowing growth and market barriers drive foreign investors to pivot toward other Asian financial markets, inline with the drop for the equity benchmarks and the increase in G-Sec yields.