After three consecutive weeks of decline, India’s foreign exchange reserves saw a significant rise of USD 2.703 billion, reaching USD 698.192 billion for the week ending July 25, according to data released by the Reserve Bank of India (RBI).
In the previous reporting week, forex reserves had dropped by USD 1.18 billion to USD 695.49 billion.
The latest increase was primarily driven by a USD 1.316 billion jump in foreign currency assets, the largest component of the reserves, which stood at USD 588.926 billion.
Gold reserves also contributed significantly, rising by USD 1.206 billion to USD 85.704 billion. Additionally, India’s Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) increased by USD 126 million, reaching USD 18.809 billion.
Central banks globally, including the RBI, have been steadily increasing their gold holdings as a safe-haven asset. Since 2021, the RBI’s gold reserves have nearly doubled in proportion to overall forex holdings.
In a longer-term context, India added around USD 58 billion to its forex reserves in 2023, recovering from a USD 71 billion decline in 2022. In 2024, the reserves climbed by over USD 20 billion, hitting an all-time high of USD 704.885 billion at the end of September 2024.
According to RBI officials, India’s current reserves are sufficient to cover 11 months of imports and 96% of its external debt, showcasing the country’s strong financial buffer.
India’s forex reserves—comprised of foreign currencies, gold, SDRs, and IMF reserve positions—are strategically managed by the RBI. It routinely intervenes in the currency markets, buying dollars when the Rupee is strong and selling when it weakens, to maintain currency stability.
