India’s Forex Reserves Climb for Eighth Straight Week, Reach $688.13 Billion

Despite consistent gains, reserves remain below September 2023 peak; RBI data shows steady buildup in foreign currency assets while gold holdings dip slightly.

Mumbai, May 4:
India’s foreign exchange reserves continued their upward trajectory for the eighth consecutive week, rising by USD 1.983 billion to USD 688.129 billion for the week ending April 25, according to the latest data released by the Reserve Bank of India (RBI).

While the reserves have shown steady gains, they still remain below the all-time high of USD 704.89 billion, recorded in September 2023.

The increase in the latest week was primarily driven by a rise in foreign currency assets (FCAs), which grew by USD 2.168 billion to USD 580.663 billion. FCAs are the largest component of the forex reserves and are expressed in dollar terms, reflecting the movement of non-US currencies such as the euro, pound, and yen.

In contrast, India’s gold reserves saw a decline of USD 207 million, bringing the total to USD 84.365 billion. However, Special Drawing Rights (SDRs) held with the International Monetary Fund (IMF) saw a marginal increase of USD 21 million, totaling USD 18.589 billion.

The previous week, ending April 18, had seen a larger jump in reserves, with an increase of USD 8.31 billion—one of the sharpest weekly spikes in recent times.

After peaking in September 2023, India’s forex reserves witnessed a temporary decline, likely due to RBI’s interventions in the currency market to prevent excessive depreciation of the rupee, which hovered near record lows against the US dollar. The central bank often intervenes by selling dollars when the rupee weakens and buying when it strengthens to ensure currency stability.

According to RBI estimates, India’s current forex reserves are sufficient to cover about 10 to 12 months of projected imports, ensuring a robust buffer amid global economic uncertainties.

In 2023, India added nearly USD 58 billion to its reserves, bouncing back from a USD 71 billion decline in 2022. In 2024 so far, the reserves have grown by a little over USD 20 billion.

Foreign exchange reserves, held largely in US dollars, also include smaller proportions in euros, yen, and pounds, and serve as a vital financial safeguard for the country’s external obligations.

Let me know if you’d like a comparative chart or a trend graph of India’s forex reserves over the past year.