Experts Say Forex Reserves Can Stabilize INR Amid Sentiment Drops

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Finance Monetary Policy

Reported Facts

Observable data points shared across all narratives

•India's forex reserves decreased from approximately $688.88 billion to $681.38 billion between May 26 and May 29, 2026.
•Experts have confirmed that the Reserve Bank of India can use these reserves to counteract downward pressure on the Indian Rupee.
•The rupee has faced recent volatility due to shifting market sentiment and external economic factors.
•Forex reserves include foreign currency assets, gold, and special drawing rights held by India.

What Could Happen If...

▸If the Reserve Bank of India increases intervention using forex reserves the Indian Rupee could stabilize or strengthen, benefiting importers and reducing inflation risks for consumers.

Market Exposure

CurrencyINR/USDIncreased Volatility

The drop in forex reserves amid efforts to support the rupee creates uncertainty in the INR/USD exchange rate.

This is not investment advice. Market exposure is based on conditional event analysis.

Key Actors

Countries

🌍South Asia

Instruments

📈Indian Rupee

Source Coverage

FINANCE

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Primary Sources (2)

FINANCEThe Hindu - BusinessForex reserves drops $7.5 billion to $681.38 billion FINANCEThe Hindu - BusinessForex reserves can be used when sentiments pull INR down: Experts

India's foreign exchange reserves dropped by $7.5 billion to $681.38 billion as of May 29, 2026. Experts say these reserves can be deployed to support the Indian Rupee when market sentiment weakens the currency. This decline in reserves reflects recent interventions to stabilize the rupee and manage economic volatility. Maintaining adequate reserves is crucial for investor confidence and inflation control in India.