India’s forex kitty nears fresh all-time high, rose by $3.3 billion in latest week

NEW DELHI: India’s foreign exchange reserves rose by $3.293 billion in the week that ended December 26 to $696.610 billion, driven by a jump in both gold reserves and foreign currency assets, the Reserve Bank of India’s latest ‘Weekly Statistical Supplement’ data showed.

Over the past few weeks, the forex kitty has been largely in an uptrend. 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 26), India’s foreign currency assets (FCA), the largest component of foreign exchange reserves, stood at $559.612 billion, up $184 million.

The RBI data showed that gold reserves currently stand at $113.320 billion, up $2.956 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 in early December, 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 2025, the forex kitty has increased by about $56 billion, according to data. In 2024, reserves rose by just over $20 billion. In 2023, India added around $58 billion to its foreign exchange reserves, contrasting with a cumulative decline of $71 billion in 2022.

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. (ANI)