India’s Forex Reserves Hit $702.3 Billion as Gold Holdings Soar

India’s Forex Reserves Hit $702.3 Billion as Gold Holdings Soar

India’s foreign exchange reserves surged by $4.5 billion to reach $702.3 billion for the week ending October 17, according to Reserve Bank of India data released on Friday. This growth was primarily driven by record-breaking gold purchases, with gold reserves crossing $108.5 billion for the first time.

Key Takeaways

• Forex reserves increased by $4.5 billion to $702.3 billion
• Gold reserves jumped $6.2 billion to record $108.5 billion
• Foreign currency assets declined by $1.7 billion to $570.4 billion
• Gold’s share in reserves has nearly doubled over the past decade

Gold Reserves Reach Historic High

India’s gold holdings surged by $6.2 billion to surpass $108.5 billion, marking the highest level ever recorded. The central bank’s proactive purchasing strategy and rising global gold prices contributed to this significant increase. Gold prices have climbed over 60% this year, driven by safe-haven demand, central bank acquisitions, and expectations of US Federal Reserve rate cuts.

Foreign Currency Assets Decline

While gold reserves expanded, foreign currency assets—which constitute the largest component of India’s forex reserves—declined by $1.7 billion to $570.4 billion. This drop was attributed to volatility in major global currencies including the euro, pound, and yen.

Long-Term Shift Toward Gold

The composition of India’s foreign exchange reserves has undergone a notable transformation over the past decade. Gold’s share has nearly doubled from under 7% to approximately 15%, reflecting the RBI’s strategic diversification approach.

Other Reserve Components

Special Drawing Rights (SDRs) with the International Monetary Fund remained stable at $18.7 billion, while India’s reserve position with the IMF stood at $4.6 billion. Since March 2025, total reserves have grown by $14.0 billion, demonstrating strong capital inflows and effective forex management.

State Government Support

The RBI’s weekly bulletin also highlighted increased support to state governments, with loans and advances rising to ₹30,095 crore as of October 17, up from ₹16,116 crore the previous week.

Precious Metals Momentum

Other precious metals including silver and platinum have followed gold’s upward trajectory. Unlike gold, silver benefits from both investment demand and industrial applications, with experts pointing to supply-demand deficits and favorable gold-to-silver ratios.