The latest figures indicate a significant recovery in the country’s foreign exchange holdings after weeks of volatility triggered by geopolitical tensions in West Asia. India’s forex reserves had previously touched an all-time high of USD 728.494 billion during the week ended February 27 this year. However, the escalation of the West Asia crisis exerted pressure on the Indian rupee, compelling the Reserve Bank of India to intervene in the foreign exchange market through dollar sales to stabilise the domestic currency.
According to the central bank’s weekly statistical supplement, foreign currency assets, which constitute the largest component of the forex reserves, increased by USD 562 million to USD 552.387 billion during the reporting week. Foreign currency assets, expressed in dollar terms, reflect the impact of appreciation or depreciation in non-US currencies such as the euro, pound sterling, and Japanese yen held in the reserves.
Gold reserves recorded the sharpest rise during the week, climbing by USD 5.637 billion to USD 120.853 billion. The increase in gold holdings significantly contributed to the overall jump in India’s foreign exchange reserves.
The Reserve Bank of India further stated that Special Drawing Rights with the International Monetary Fund increased by USD 84 million to USD 18.873 billion. In addition, India’s reserve position with the International Monetary Fund rose by USD 12 million to USD 4.875 billion by the end of the reporting week.
The latest rise in foreign exchange reserves reflects strengthening external buffers for the Indian economy at a time of global financial uncertainty and persistent geopolitical tensions. The recovery also highlights the Reserve Bank of India’s continued efforts to maintain currency stability and safeguard the country’s financial position amid fluctuating international market conditions.
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