MUMBAI– India’s foreign exchange reserves rose by $3.51 billion to reach $694.23 billion for the week ending August 29, according to data released Friday by the Reserve Bank of India (RBI).
Foreign currency assets, which form the largest share of the reserves, climbed by $1.69 billion to $583.94 billion. In dollar terms, these assets reflect changes in the value of other currencies such as the euro, pound, and yen held by the RBI.
The gold component also saw a sharp increase, rising by $1.77 billion to $86.77 billion. Central banks across the globe have been accumulating gold in recent years as a safe-haven asset amid geopolitical uncertainty. The RBI’s gold holdings have nearly doubled since 2021 as part of its forex strategy.
Special drawing rights in the reserve basket stood at $18.78 billion, up $40 million from the previous week.
Analysts note that a strong forex buffer gives the RBI more flexibility in stabilizing the rupee against the U.S. dollar. Ample reserves allow the central bank to release dollars in the spot and forward markets, helping prevent excessive volatility.
India’s forex reserves are currently enough to cover more than 11 months of goods imports and about 96 percent of the country’s outstanding external debt, RBI Governor Sanjay Malhotra said recently.
“Overall, India’s external sector remains resilient as key external sector vulnerability indicators continue to improve. We remain confident of meeting our external financing requirements,” Malhotra said.
Meanwhile, India’s merchandise exports registered a 7.29 percent increase in July, rising to $37.24 billion compared with $34.71 billion in the same month last year, government data released Thursday showed.
“Despite an uncertain global policy environment, India’s services and merchandise exports in July and in FY26 so far have grown substantially, and are much higher than the global exports growth,” Commerce Secretary Sunil Barthwal said.
He added that engineering goods, electronics, pharmaceuticals, organic and inorganic chemicals, and gems and jewelry were the main drivers of July’s export growth. (Source: IANS)
