The foreign exchange reserves of India fell $6.711 billion in the week ended 6 February to $717.064 billion, after reaching a new all-time high in the previous week, according to the latest data released by the Reserve Bank of India.
The country’s foreign exchange reserves dropped significantly in the week under consideration, primarily led by a dip in gold reserves, while foreign currency assets grew.
Over the past few weeks, India’s forex reserves have generally risen, reaching a record high of $723.774 billion last week.
For the week ended on 6 February, the country’s foreign currency assets (FCA), the biggest component of foreign exchange reserves, were at $570.053 billion, up $7.661 billion.
Meanwhile, gold reserves currently stood at $123.476 billion, down $14.208 billion from the previous week, according to RBI data.
Following the latest monetary policy review earlier this month, the RBI stated that the country’s foreign exchange reserves were adequate to cover more than 11 months of merchandise imports. RBI noted that India’s external sector remains resilient and expressed confidence in its ability to comfortably meet the country’s external financing requirements, ANI reported.
In 2025, the forex kitty increased by about $56 billion, according to RBI data, while reserves rose by just over $20 billion in the year prior.
India increased its foreign exchange reserves by approximately $58 billion in 2023, compared to a total decrease of $71 billion in 2022.
Foreign exchange reserves, also known as forex reserves, are assets maintained by a country’s central bank or monetary authority. These reserves are mainly in reserve currencies such as the US dollar, with smaller amounts in the Euro, Japanese yen, and Pound Sterling.
The RBI often intervenes by managing liquidity, including selling dollars, to prevent a sharp depreciation of the rupee. The RBI strategically buys dollars when the rupee is strong and ideally sells when it weakens.