India’s foreign exchange reserves fell for a second consecutive week, declining by $1.8 billion to $686.2 billion for the week ending 28 November 2025, according to the latest data released by the Reserve Bank of India. The fall extends a multi-week downtrend, following a sharper $4.4 billion drop in the previous reporting week.
The latest decline was driven primarily by a reduction in foreign currency assets, which constitute the largest portion of India’s reserves. FCA fell by $3.5 billion to $557 billion during the week, reflecting valuation changes in major currencies as well as the RBI’s interventions in the foreign exchange market. Despite the broader fall in reserves, India’s gold holdings rose by $1.6 billion to $105.7 billion, supported by a strong rally in global gold prices amid geopolitical uncertainty and heightened investor demand. Central banks worldwide have been increasing their gold exposure in response to market turbulence, and India’s holdings are no exception.
Other components of the forex basket also registered gains. Special Drawing Rights increased by $63 million to $18.62 billion, while India’s reserve position with the International Monetary Fund rose by $16 million to $4.7 billion. These changes helped cushion the overall decline even as the headline level continued to dip. Foreign exchange reserves—held in major currencies such as the US dollar, euro, yen and pound—serve as a critical safeguard against external shocks. India added $58 billion to its reserves in 2023, after a $71 billion depletion the previous year, and accumulated a further $20 billion in 2024. With 2025 showing a cumulative gain of $48 billion so far, the RBI continues to actively manage rupee volatility, often selling dollars during periods of weakness and buying them when the currency strengthens.
India’s forex trajectory will remain closely tied to global financial conditions, commodity prices and capital flows. With economic and geopolitical risks still elevated, the central bank is expected to maintain its calibrated interventions to preserve stability in the currency and broader financial markets.
