India’s foreign exchange reserves (forex) rose by USD 4.553 billion to USD 690.617 billion in the week ending May 9, according to official data released by the Reserve Bank of India (RBI). The previous all-time high was USD 704.89 billion in September 2024. After extending gains for eight consecutive weeks, the forex kitty declined in the following week, only to rise again in the week ending May 9. Prior to the latest increase, forex reserves had declined for about four months.
The latest RBI data showed that India’s foreign currency assets (FCA), the largest component of foreign exchange reserves, stood at USD 581.373 billion. Gold reserves currently amount to USD 86.337 billion, according to RBI data, rising by a whopping USD 4.518 billion in the latest week.
Central banks across the world are increasingly accumulating safe-haven gold in their foreign exchange reserves, and India is no exception. The share of gold maintained by the Reserve Bank of India in its foreign exchange reserves has almost doubled since 2021.
Estimates suggest that India’s foreign exchange reserves are sufficient to cover approximately 10–12 months of projected imports. In 2023, India added around USD 58 billion to its foreign exchange reserves, contrasting with a cumulative decline of USD 71 billion in 2022. In 2024, the reserves have risen by a little over USD 20 billion.
Foreign exchange reserves, or FX reserves, are assets held by a nation’s central bank or monetary authority, primarily in reserve currencies such as the US Dollar, with smaller portions in the Euro, Japanese Yen, and Pound Sterling. The RBI often intervenes by managing liquidity, including selling dollars, to prevent steep Rupee depreciation. It strategically buys dollars when the Rupee is strong and sells when it weakens.
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