India’s foreign exchange reserves have experienced a notable decline, marking the end of a three-week upward trend. As of February 14, reserves fell by $2.54 billion, settling at $635.72 billion.

Factors Behind the Decline:

1. Central Bank Interventions: The Reserve Bank of India (RBI) engaged in forex market interventions to stabilize the rupee, reducing overall reserves.
2. Currency Depreciation: The rupee faced downward pressure due to sluggish economic growth, global trade uncertainties, and interest rate cuts.
3. Foreign Outflows: A portion of the decline can also be attributed to foreign institutional investors pulling out funds amid market volatility.

Despite this drop, India’s forex reserves remain robust, providing a cushion against economic shocks. Analysts will closely monitor future fluctuations to gauge the overall health of the country’s external finances.