Global currency market reserves are falling at the fastest pace on record from  India to the Czech Republic, intervening to support currencies with the help of the Central bank. In the year 2022, the reserve has declined by 1 trillion or 7.8 per cent to 12 trillion, the biggest drop after Bloomberg started in 2003.

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The central bank said, “asset valuation changes account for 67 per cent of the decline in reserves during the fiscal year from April, implying the rest came from intervention to prop up the currency. The rupee has lost about 9 per cent against the dollar in 2022 and hit a record low last month.

“This is all part of the catalogue of symptoms of the canary in the coal mine,” said Axel Merk, chief investment officer at Merk Investments, of the declining reserves. “Cracks are showing up. And those red flags will come at an increasing pace.”

“Some countries, notably in Asia, can go both ways, smoothing weakness and pockets of strength,” said Alan Ruskin, chief international strategist at Deutsche Bank AG.

In India, Foreign reserves are still 49 per cent higher than 2017 levels and enough to pay for nine months of imports. After declining 42 per cent in 2022, $14 billion in Pakistan reserves is not enough to cover three months of imports, data compiled by Bloomberg show.