After a strong gain in the previous week, India’s foreign exchange reserves declined by over $1 billion, with key drops in foreign currency assets and gold holdings.
Mumbai, June 29 — India’s foreign exchange reserves declined by USD 1.02 billion in the latest reporting week, settling at USD 697.93 billion, according to data released by the Reserve Bank of India (RBI). The dip comes after a robust increase in the previous week, when reserves had surged by USD 2.294 billion, reaching a then-record USD 698.95 billion for the week ending June 13.
As per data for the week ending June 20, foreign currency assets (FCAs) — the largest component of the forex reserves — fell by USD 0.36 billion, bringing the total to USD 589.07 billion.
Meanwhile, gold reserves also recorded a marginal decline, slipping by USD 5.73 million to stand at USD 85.74 billion, according to the central bank’s weekly statistical supplement.
The Special Drawing Rights (SDRs) — international reserve assets maintained by the International Monetary Fund (IMF) — dropped by USD 85 million, reducing the total to USD 18.67 billion.
Despite the current dip, India’s forex reserves remain historically strong. In 2023, India added approximately USD 58 billion to its reserves, reversing the USD 71 billion cumulative decline experienced in 2022. In 2024, the reserves have grown by over USD 20 billion so far.
A notable trend in recent years has been the rising share of gold reserves in India’s overall forex portfolio. Since 2021, the Reserve Bank of India has nearly doubled its gold holdings, aligning with a global pattern where central banks are increasingly turning to gold as a safe-haven asset.
Commenting on the resilience of India’s external sector, Finance Secretary Sanjay Malhotra recently stated that the forex reserves are adequate to cover 11 months of imports and 96% of India’s external debt. He described key external sector vulnerability indicators as “improving steadily.”
Foreign exchange reserves, commonly referred to as forex or FX reserves, are assets held by a nation’s central bank in reserve currencies such as the US Dollar, Euro, Japanese Yen, and Pound Sterling. These reserves act as a buffer against currency volatility and external shocks.
The RBI actively manages the reserves, often buying US dollars when the Rupee strengthens and selling them when it depreciates, helping stabilize the exchange rate and maintain market confidence.