MediumIV Macro Policy & Sovereign Debt25 September 2026, Friday
India's foreign exchange reserves fell $14.88 billion in the week to 18 September to $765.9 billion; $14.82 billion of the drop came from currency assets
According to RBI data released on 25 September, foreign exchange reserves fell $14.88 billion in the week ended 18 September, from $780.78 billion to $765.9 billion. $14.82 billion of the drop came from foreign currency assets; the rupee closed at 95.81 on 25 September.
According to RBI data cited in an ANI-sourced report by The Tribune, total reserves fell $14.88 billion to $765.90 billion in the week ended 18 September, from $780.78 billion the previous week. Foreign currency assets, the largest component of reserves, fell $14.82 billion to $630.98 billion. Gold reserves rose $68 million to $111.29 billion, while SDRs fell $106 million to $18.74 billion and the IMF reserve position fell $27 million to $4.89 billion. Reserves are nonetheless $74.79 billion higher than at the end of March 2026 and $63.33 billion higher than a year earlier.
According to Whalesbook, the rupee strengthened on 25 September from its previous close of 95.96 to 95.81, helped by falling oil prices and RBI intervention. According to the same report, the one-year forward premium rose to 3.50%, its highest since May. That almost the entire drop in the reserve data came from foreign currency assets while the gold component rose $68 million is consistent with the reading that the loss stemmed from dollar sales into the market rather than valuation effects; however, since the RBI does not disclose its weekly intervention amount, this distinction could not be verified. On which days the reserve decline occurred was also not disclosed.
Talay assessment
Bottom line
The RBI spent reserves to keep the rupee below the 96 threshold; the loss of $14.82 billion in foreign currency assets in a single week shows the cost of this defence. The $765.9 billion stock and the $63.33 billion year-on-year surplus provide a near-term buffer, but if the same pace persists for several weeks, intervention capacity will come into question.
Likely effects
- RupeeNegativeWeeks
Intervention is holding the 96 threshold for now; the forward premium rising to 3.50% shows the market pricing expectations of forward depreciation.
- Indian monetary policyNegative1–6 months
Reserve drawdowns are tightening rupee liquidity in the banking system, deepening the RBI's dilemma between interest rates and currency stability.
- Emerging market currenciesNegativeWeeks
A major energy importer losing $14.88 billion in reserves in a single week shows that the high oil bill is a common pressure on the currencies of energy-importing emerging economies, including Türkiye.
Possibilities, ranked
- 1Controlled defence continues55%
The RBI keeps weekly reserve declines smaller and holds the rupee in the 95–97 band.
Watch: RBI reserve data for the next two weeks and the rupee's 96 level
- 2Rupee durably breaches 9630%
If Brent keeps rising, the RBI slows intervention and the rupee is allowed a controlled depreciation.
Watch: Brent holding above $105 and daily rupee closes
- 3Pressure eases15%
With the oil price falling below $100, reserves start rising again.
Watch: Brent falling below $100 and a weekly rise in reserves
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- India FX reserves▼ −$14.88 billion
- Rupee (25 Sep close)▲ 95.81
- 1-year forward premium▲ 3.50%