Mumbai: India’s foreign exchange reserves fell sharply by $6.7 billion in the week ended February 6, 2026, primarily due to a steep decline in the value of gold reserves, according to data released by the Reserve Bank of India (RBI).
The RBI’s weekly statistical report showed that total forex reserves dropped by $6.711 billion to $717.064 billion. This decline came just a week after reserves had surged by $14.361 billion to an all-time high of $723.774 billion, making the sudden reversal a key point of discussion among market watchers.
Gold Reserves See Major Erosion
The largest contributor to the overall fall was a sharp drop in gold reserves. During the reporting week, the value of India’s gold holdings fell by $14.208 billion to $123.476 billion. Analysts attributed the decline mainly to global fluctuations in gold prices and revaluation of assets in international markets, rather than any physical sale of gold by the central bank.
Foreign Currency Assets Rise
Despite the hit to gold reserves, foreign currency assets (FCA)—the biggest component of India’s forex reserves—rose significantly. FCA increased by $7.661 billion to $570.053 billion. These assets include holdings in major global currencies such as the U.S. dollar, euro, pound sterling, and Japanese yen, and their value is influenced by exchange rate movements.
Other Reserve Components
Other elements of the forex reserves saw marginal declines:
- Special Drawing Rights (SDR): Fell by $132 million to $18.821 billion.
- IMF reserve position: Declined by $32 million to $4.715 billion with the International Monetary Fund.
What the Decline Signals
Economists say the week-on-week volatility in India’s forex reserves reflects global gold price movements and possible RBI interventions in currency markets to manage the rupee. Despite the sharp fall, India’s reserves remain among the strongest globally, providing a solid buffer against external shocks and supporting overall economic stability.
Market experts emphasize that such fluctuations are common and do not signal any immediate concern, especially given the country’s robust external position and strong foreign currency assets base.