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Question

During the week under review (as of May 2023), which component of India's forex reserves witnessed the most significant decrease?
  • Foreign Currency Assets
  • Special Drawing Rights
  • Reserve position in the IMF
  • None of the above
Answer- A
India's foreign exchange reserves, which had been consistently growing in recent weeks, witnessed a decrease of $6.1 billion during the week ending on May 19, 2023.

This reversal follows three consecutive weeks of growth and affects all components of the reserves with the foreign currency assets (FCA) experiencing the most significant impact.