New Delhi – June 21, 2025:
India’s foreign exchange reserves surged by $2.294 billion in the week ending June 13 to touch $698.95 billion, according to data released by the Reserve Bank of India (RBI) on Friday. This latest increase brings the forex kitty within striking distance of its all-time peak of $704.89 billion, recorded in September 2024.

During the latest monetary policy review, RBI Governor Sanjay Malhotra assured that India’s forex holdings were robust enough to cover 11 months of imports and almost 96% of the nation’s total external debt, indicating significant resilience against external shocks.

“The reserve position reflects strong macroeconomic fundamentals and confidence in India's external stability,” said Governor Malhotra.

Breakdown of Reserves

India’s foreign currency assets (FCA), which constitute the largest portion of the total reserves, stood at $589.426 billion, showing a stable buildup in core assets held in major global currencies such as the US Dollar, Euro, Japanese Yen, and Pound Sterling.

Meanwhile, gold reserves—another key component—reached $86.316 billion. Central banks around the world have increasingly turned to gold as a safe-haven asset, and the RBI has doubled the gold share in its total reserves since 2021.

In fact, India added nearly $58 billion to its reserves in 2023, reversing the sharp decline of $71 billion in 2022.

Strategic Forex Management by RBI

The RBI continues its strategy of stabilizing the Rupee through intelligent intervention. By buying dollars when the Rupee is strong and selling them when it weakens, the central bank manages volatility, ensuring market confidence and investor trust.

The forex reserves act as a critical cushion during external economic disruptions, including global oil price spikes, geopolitical tensions, and capital flow volatility.

“This consistent growth in reserves underscores India’s careful fiscal and monetary discipline,” said a senior economist with a public sector bank.

Comparison with Global Trends

India's forex management aligns with a global trend of increased gold accumulation by central banks, particularly among emerging economies seeking to diversify away from US dollar dependency.

Other components of the reserves—such as Special Drawing Rights (SDRs) with the IMF and India’s reserve tranche position—have also remained steady.

Conclusion

With global markets increasingly volatile due to geopolitical tensions, India’s near-record foreign exchange reserves highlight the country’s strong financial fundamentals and prudent central bank policies.

At $698.95 billion, the reserves stand as a testament to India's economic resilience, offering a significant buffer against future external pressures while supporting the Rupee and the broader macroeconomic environment.

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