The country’s foreign exchange reserves fell by $28.05 billion to $607.31 billion at the end of March this year, from $635.36 billion at the end of September 2021, according to an RBI report.
The Reserve Bank of India (RBI) publishes semi-annual reports on foreign exchange reserve management as part of its efforts to increase transparency and disclosure.
These reports are prepared every six months with reference to the status at the end of March and September of each year. The present report, which is the 38th in this series, relates to the status at the end of March 2022.
“During the reporting half-year, reserves decreased from $635.36 billion at the end of September 2021 to $607.31 billion at the end of March 2022,” the Reserve Bank of India (RBI) said in the report released on Thursday.
Although both the US Dollar and the Euro are intervention currencies and foreign currency assets (FCA) are held in major currencies, foreign exchange reserves are denominated and expressed in US Dollars.
Movements in the FCA are primarily due to RBI’s purchases and sales of foreign exchange, income from the use of foreign exchange reserves, income from external central government assistance and changes due to asset revaluations.
RBI’s net term assets (receivable) on the domestic foreign exchange market was US$65.79 billion at the end of March 2022.
At the end of December 2021, the coverage of imports by foreign exchange reserves (on a balance of payments basis) decreased to 13.1 months from 14.6 months at the end of September 2021.
At the end of March 2022, the RBI held 760.42 tons of gold (including gold deposits of 11.08 tons), the central bank said.
While 453.52 tonnes of gold are held overseas by the Bank of England and the Bank for International Settlements (BIS), 295.82 tonnes of gold are held domestically.
In terms of value, gold’s share of total foreign exchange reserves increased from about 5.88% at the end of September 2021 to about 7.01% at the end of March 2022, it said.
Of the total FCA of $540.72 billion in March, $363.03 billion was invested in securities, $140.54 billion was deposited with other central banks and the BIS, and the remaining 37.16 Billions of US dollars consisted of deposits at commercial banks abroad.