India’s Forex Reserves See Sharp Rise
Now it’s time to talk about foreign exchange reserves in India, they have just had the biggest lift-off. According to the RBI’s latest ‘Weekly Statistical Supplement’, during the week ending December 19, the reserves increased by USD 4.368 billion and reached an incredible total of USD 693.318 billion. This increase was due to a sparkling rise in gold reserves and foreign currency assets.
It seems the forex pile has not been just sitting there quietly, it has been on a steady upward march in the last few weeks, getting closer to its all-time high of USD 704.89 billion set in September 2024. Gold reserves shone with an increase of USD 2.623 billion, while foreign currency assets joined the party with a gain of USD 1.641 billion.
What is the reason for the miracle? It is the strong global demand for safe-haven assets, the clever RBI interventions, and the good state of external finances that made it happen. If you think only Bitcoin can amaze investors, then India’s forex reserves are here to show that the real treasure might just be quietly lying in the central bank vaults!
Gold And Foreign Currency Assets Drive Growth
For the reported week ending December 19, India’s foreign currency assets (FCA), the largest component of foreign exchange reserves, stood at USD 559.428 billion, up USD 1.641 billion. The RBI data showed that gold reserves currently stand at USD 110.365 billion, up USD 2.623 billion from the previous week. The price of the safe-haven asset gold has been on a sharp uptrend over recent months, perhaps amid heightened global uncertainties and robust investment demand.
RBI Confident In External Sector Resilience
After the latest monetary policy review meeting, the RBI had said that the country’s foreign exchange reserves were sufficient to cover more than 11 months of merchandise imports. Overall, India’s external sector remains resilient, and the RBI is confident it can comfortably meet external financing requirements.
Historical Perspective: Growth Over Recent Years
In 2023, India added around USD 58 billion to its foreign exchange reserves, contrasting with a cumulative decline of USD 71 billion in 2022. In 2024, reserves rose by just over USD 20 billion. So far in 2025, the forex kitty has increased by over USD 50 billion, according to data.
Foreign exchange reserves, or FX reserves, are assets held by a nation’s central bank or monetary authority, primarily in reserve currencies such as the US dollar, with smaller portions in the Euro, Japanese Yen, and Pound Sterling. The RBI often intervenes by managing liquidity, including selling dollars, to prevent a steep depreciation of the rupee. The RBI strategically buys dollars when the rupee is strong and sells when it weakens.
(With Inputs From ANI)
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