India’s foreign exchange (forex) reserves surged by $4.368 billion to $693.318 billion during the week ended December 19, according to the latest data released by the Reserve Bank of India (RBI). Gold reserves also witnessed a significant increase, rising by $2.623 billion to $110.365 billion during the same period.
The previous week saw the overall reserves climb by $1.689 billion to $688.949 billion.
Component-wise Breakdown:
- Foreign currency assets (FCA): The major component of forex reserves increased by $1.641 billion to $559.428 billion. FCA values include the impact of appreciation or depreciation of non-US currencies such as the euro, pound, and yen held in reserves.
- Special Drawing Rights (SDRs): Up by $8 million to $18.744 billion.
- Reserve position with the IMF: Rose by $95 million to $4.782 billion.
The sharp rise in gold holdings reflects heightened global uncertainties and strong investor demand for the safe-haven asset in recent months.
Following the last monetary policy review, the RBI stated that India’s foreign exchange reserves are sufficient to cover more than 11 months of merchandise imports. The central bank affirmed that India’s external sector remains resilient and that the country can comfortably meet external financing requirements.
Forex Trends Over Recent Years:
- In 2023, India added roughly $58 billion to its forex reserves, in contrast to a cumulative decline of $71 billion in 2022.
- In 2024, reserves grew by just over $20 billion.
- In 2025 so far, the forex kitty has increased by about $47–48 billion.
Foreign exchange reserves, or FX reserves, are assets held by a nation’s central bank primarily in reserve currencies such as the US dollar, with smaller portions in the euro, Japanese yen, and pound sterling.
