India’s foreign exchange reserves slipped by USD 3.049 billion to USD 699.736 billion for the week ending July 4, according to the latest data released by the Reserve Bank of India (RBI). The dip comes amid continued global trade uncertainty and market volatility.
This decline follows a strong increase of USD 4.8 billion in the previous week, which had pushed the country’s reserves to USD 702.78 billion.
The drop in forex reserves was largely driven by a fall in foreign currency assets (FCA) — the largest component of the reserves — which declined by USD 3.537 billion to USD 591.287 billion. However, other components of the reserves registered marginal gains.
Gold reserves saw a modest uptick of USD 342 million, reaching USD 84.846 billion, reflecting a broader global trend of central banks — including the RBI — increasing their gold holdings as a safe-haven asset. India’s gold share in forex reserves has nearly doubled since 2021, underlining its growing strategic importance.
Meanwhile, Special Drawing Rights (SDRs) rose by USD 39 million, and India’s reserve position in the International Monetary Fund (IMF) increased by USD 107 million to USD 4.735 billion.
Despite the week’s decline, India’s forex reserves remain robust. As of July 2025, they are sufficient to cover 11 months of imports and 96% of the country’s external debt, said RBI Governor Sanjay Malhotra during the recent Monetary Policy Committee (MPC) briefing. He emphasized that India’s external sector remains resilient, with key vulnerability indicators showing continued improvement.
In recent years, India’s forex reserves have seen significant growth. In 2023, reserves surged by USD 58 billion, contrasting with a USD 71 billion decline in 2022. By the end of September 2024, India’s reserves had reached a record USD 704.885 billion, supported by stable capital inflows and strategic dollar purchases by the RBI.
The central bank continues to manage exchange rate volatility by intervening in the currency markets — buying dollars when the Rupee strengthens and selling them during periods of weakness — to stabilize the Rupee and support macroeconomic stability.
