India’s Forex Reserves Drop To One-Year Low As RBI Defends Sliding Rupee

India’s Forex Reserves Hit One-Year Low

India’s forex reserves fell by USD 8.94 billion to USD 688.89 billion in the week ending May 15, 2026. This marks the lowest level in over a year, down from the record high of USD 728.49 billion in February 2026. The drop reflects sustained RBI dollar sales to stabilize the rupee. 

Rupee Under Pressure

The Indian rupee has depreciated close to 8% in 2026, touching an all-time low of 96.90 per dollar in May. Rising crude oil prices, disruptions in the Strait of Hormuz, and capital outflows of over USD 22 billion from foreign portfolio investors have intensified pressure. 

RBI’s Intervention

The RBI has been actively selling dollars from its reserves to slow the rupee’s slide. While this strategy cushions volatility, it has led to a sharp depletion of reserves. The central bank faces the challenge of balancing currency stability with maintaining adequate reserves for external shocks. 

Breakdown Of Reserves

• Foreign currency assets fell by USD 6.48 billion to USD 545.90 billion
• Gold reserves declined by USD 1.53 billion to USD 119.31 billion
• Special Drawing Rights (SDRs) dropped by USD 49 million to USD 18.82 billion
• IMF reserve position decreased by USD 25 million to USD 4.85 billion 

Finance Insights

• India’s forex reserves at USD 688.89 billion, lowest in over a year
• Rupee hit record low of 96.90 per dollar in May 2026
• RBI selling dollars to defend rupee, draining reserves
• Foreign portfolio investors pulled out USD 22 billion since February
• Oil prices near USD 110 per barrel adding pressure

Sources: Reserve Bank of India, The Economic Times, The New Indian Express, Outlook Business, India Today