The 12-month decline in India’s forex reserves has been quite sharp and largest on record, of-course after largest on record accretion of reserves just preceding this period!
In absolute terms :
And in percentage terms:
However, reserve buffer is still OK in absolute terms…thanks to the wise policy of building reserves earlier.
Although in terms of import cover, it has now fallen quite a lot… thanks to surging imports.
Yesterday RBI made an interesting point that about 67% of reserve decline is due to valuation effect and not actual selling. This is only partially comforting, since the high trade deficit, which is the main culprit in external account pressure, is denominated in USD terms only.