India’s Forex Reserves Soar to $693.6 Billion, Closing in on Record High

India’s foreign exchange reserves grew by USD 4.747 billion in the week ending August 8, reaching USD 693.618 billion," RBI’s latest report shows. The rise was driven by gains in both foreign currency assets and gold. Last week, India’s forex reserves fell sharply by USD 9.32 billion, but they still remain close to the record high of USD 704.89 billion reached in September 2024. After the recent monetary policy review, RBI Governor Sanjay Malhotra said that the reserves are enough to cover 11 months of the country's imports.

Foreign Currency Assets and Gold Holdings

RBI data showed that foreign currency assets, which are the largest part of India's forex reserves, stood at USD 583.979 billion. Gold reserves currently account for USD 86.160 billion. India’s forex reserves grew by around USD 58 billion in 2023, after dropping USD 71 billion in 2022. In 2024, they rose by just over USD 20 billion, and so far in 2025, the reserves have increased by about USD 53 billion.

Understanding Foreign Exchange Reserves

Foreign exchange reserves, or FX reserves, are funds held by a country’s central bank in foreign currencies such as the US dollar, with smaller amounts in the euro, yen, and pound. These reserves help the country keep its currency stable and support the economy.

RBI's Role in Managing Reserves

The RBI carefully controls money flow to prevent the rupee from dropping sharply.It sells dollars when the rupee weakens and buys dollars when the rupee strengthens, ensuring stability in the foreign exchange market.