India’s forex reserves rise by $1.03 billion to $687.26 billion

NEW DELHI: India’s foreign exchange reserves rose marginally by $1.033 billion in the week that ended December 5 to $687.260 billion, driven by a jump in gold reserves, the Reserve Bank of India’s latest ‘Weekly Statistical Supplement’ data showed.

Over the past few weeks, the forex kitty has been largely in a downtrend, except for a few. Still, the country’s foreign exchange (forex) kitty is hovering close to its all-time high of $704.89 billion, reached in September 2024.

For the reported week (that ended December 5), India’s foreign currency assets (FCA), the largest component of foreign exchange reserves, stood at $556.880 billion, down $151 million. The RBI data showed that gold reserves currently stand at $106.984 billion, up $1.033 billion from the previous week.

The price of the safe-haven asset gold has been on a sharp uptrend over recent months, perhaps amid heightened global uncertainties and robust investment demand. After the latest monetary policy review meeting, the RBI had said that the country’s foreign exchange reserves were sufficient to cover more than 11 months of merchandise imports.

Overall, India’s external sector remains resilient, and the RBI is confident it can comfortably meet external financing requirements. In 2023, India added around $58 billion to its foreign exchange reserves, contrasting with a cumulative decline of $71 billion in 2022. In 2024, reserves rose by just over $20 billion.

So far in 2025, the forex kitty has increased by about $47-48 billion, according to data. 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 a steep depreciation of the rupee. The RBI strategically buys dollars when the Rupee is strong and sells when it weakens. The Indian rupee has been under pressure for a host of reasons. It has already weakened by over 5 per cent this year on a cumulative basis. (ANI)