India’s Forex Reserves Fall for Third Straight Week, Hit $747.56 Billion

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Even with no change to a dollar invoice, a business needs more rupees to pay it after the Indian currency weakens. Payments already due become costlier, and prolonged weakness keeps pressure on import bills. Household prices and loan instalments do not rise directly because reserves fell during the week.

How Does The Reserve Fall Affect Indian Borrowers?

The reserve balance supports the country’s ability to manage external payment pressures. To restrain excessive currency swings during the rupee’s decline, the central bank intervened through dollar sales and foreign exchange swaps. Those operations draw attention to the role of foreign exchange reserves, particularly when businesses face uncertain costs for payments abroad.

Our view is that borrowers need to separate this currency-market development from changes to their loan terms. A rupee loan’s instalment follows its interest rate, repayment period and contractual reset rules. The reserve headline is therefore more directly relevant to foreign-currency payments than to an existing domestic EMI. Reading it as an automatic loan-rate increase would go beyond what the figures show.

Why Did Foreign Currency Assets And Gold Decline?

Reserve accounts convert the value of euro, pound and yen holdings into US dollars. Those holdings are worth fewer dollars when their currencies weaken against the dollar, reducing the amount recorded. Currency operations also affect the balance, so the weekly change captures more than dollar sales alone.

Gold contributed to the latest decline too. A lower reported value does not establish that physical gold was sold. The government update dated October 2, 2026 confirmed reductions across all reserve components. The exact figures below appear in the October 2 official release.

The biggest reduction came from foreign currency assets, followed by gold. Neither of the remaining components fell by as much. The official release notes that rounding can produce differences between component totals and the overall balance.

What Do Economists Say About The Decline?

Gaura Sengupta, chief economist at IDFC First Bank, attributed the decline to intervention and valuation losses in comments published on October 2, 2026. “The rest of the decline was due to revaluation losses,” she said, identifying gold and foreign currency assets as contributors.

Her assessment helps explain why the full weekly fall should not be described as money spent defending the rupee. Dollar sales and swaps formed part of the response to currency pressure, while movements in asset values also reduced the reported balance. The published weekly figures do not assign separate amounts to those causes.

What Happened Before The Latest Fall?

The preceding update, released on September 25, 2026, showed reserves falling $14.881 billion to $765.901 billion for the week ended September 18. Foreign currency assets led that decline as well. Gold increased in value during that earlier week, providing a partial offset that disappeared in the latest figures.

The consecutive falls followed September’s record reserve level. Deposit and borrowing facilities had brought substantial foreign currency into India, the Finance Ministry said in its August 24, 2026, statement. That earlier accumulation provides context for the subsequent retreat, rather than evidence that every weekly movement has the same cause.

Conclusion

India’s latest reserve decline reflects lower foreign currency assets and gold values during a period of rupee pressure. For borrowers, exposure to exchange-rate changes is separate from the terms that determine domestic loan costs. The weekly reserve change is a currency-market development, not an automatic revision to an existing EMI.

Frequently Asked Questions

How Much Did India’s Forex Reserves Fall?

By September 25, 2026, reserves stood at $747.557 billion after a weekly reduction of $18.343 billion.

When Were The Latest Figures Released?

September 25, 2026, is the date of the reserve holdings measured in this update. Publication followed on October 2, 2026.

Does The Reserve Decline Automatically Increase Loan EMIs?

No. An EMI depends on the loan’s interest rate, repayment period and applicable reset terms, rather than a weekly reserve movement.

How Are Forex Reserves Useful To The Economy?

The country uses foreign exchange reserves to support payments abroad. They also fund intervention to address disruption in currency markets.

Why Does The Rupee’s Value Affect Forex Reserves?

Selling dollars to manage rupee volatility changes the central bank’s reserve balance. Other holdings also change in dollar value as their currencies move against the dollar, independently of those sales.