India’s Forex Reserves Dip to $689.7 Billion, Remain Near Record High
India’s foreign exchange reserves declined by $5.623 billion to $689.733 billion in the week ending October 31, according to the latest RBI data. Despite the recent drop, the reserves remain close to the all-time high of $704.89 billion reached in September 2024.
Key Takeaways
- Forex reserves fell by $5.623 billion to $689.733 billion
- Gold reserves dropped by $3.810 billion to $101.726 billion
- Foreign currency assets decreased by $1.957 billion to $564.591 billion
- Reserves remain near record high of $704.89 billion
Weekly Reserve Components
The decline was driven by reductions in both foreign currency assets and gold holdings. Foreign currency assets, the largest component of reserves, decreased to $564.591 billion. Gold reserves fell to $101.726 billion amid a global uptrend in gold prices.
Long-Term Reserve Trends
India’s forex reserves have shown strong growth over recent years:
- 2023: Added $58 billion
- 2024: Increased by over $20 billion
- 2025: Cumulative growth of about $40 billion so far
This contrasts with the $71 billion decline experienced in 2022.
RBI’s Confidence in External Sector
After the latest monetary policy review, RBI Governor Sanjay Malhotra stated that the foreign exchange reserves are sufficient to cover more than 11 months of merchandise imports. The central bank remains confident about comfortably meeting external obligations.
The RBI actively manages liquidity and intervenes in currency markets, buying dollars when the rupee is strong and selling during weakness to prevent steep depreciation.
Foreign exchange reserves comprise assets held by the central bank, primarily in US dollars with smaller portions in Euro, Japanese Yen, and Pound Sterling.
