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India’s forex reserves see sharp drawdown amid global USD strength surge
This reserves decline highlights sensitivity to USD strength persistence even as India still retains strong buffer levels compared to historic stress points.
$6.92 billion was the decline in India’s forex reserves last week bringing total reserves to $695.36 billion. Analysts indicated part of the shift is driven by strengthening USD directional flows and dividend outflows. FX strategists said while this drawdown is notable on a weekly basis, reserves remain materially robust relative to historical risk periods. Market desks are tracking spillover sensitivity to USD strength persistence into November. For allocators this data release reinforces caution on India’s external sector hedging posture ahead of higher EM volatility windows.