India’s foreign exchange reserves increased by USD 305 million, reaching USD 654.271 billion in the week ending March 14.
This rise follows the previous week’s surge, which marked the highest weekly gains in over three years. Prior to these recent increases, forex reserves had experienced a steady decline for about four months, slipping to an 11-month low. The trend has since seen fluctuations, with alternate weeks of gains and declines.
India’s forex reserves had earlier reached an all-time high of USD 704.89 billion in September. Since then, they have fallen by nearly 7 percent from that peak. The Reserve Bank of India (RBI)’s interventions, primarily to curb a sharp depreciation of the Rupee, are considered a key reason for the decline. Currently, the Indian Rupee hovers at or near its record low against the US dollar.
According to the latest RBI data, India’s foreign currency assets (FCA)—the largest component of forex reserves—stand at USD 557.186 billion. Gold reserves are valued at USD 74.391 billion.
Estimates suggest that the country’s forex reserves are adequate to cover approximately 10 to 11 months of projected imports.
In 2023, India added about USD 58 billion to its forex reserves, in contrast to a cumulative decline of USD 71 billion recorded in 2022. In 2024, the reserves saw a modest increase of slightly over USD 20 billion.
Foreign exchange reserves, or FX reserves, are assets held by a country’s central bank or monetary authority, mainly in reserve currencies such as the US dollar, with smaller holdings in the Euro, Japanese Yen, and Pound Sterling.
The RBI frequently intervenes in the forex market, managing liquidity by buying dollars when the Rupee strengthens and selling them when it weakens. These measures are aimed at stabilizing the currency and preventing steep depreciation. (ANI)