India’s foreign exchange reserves soared to an all-time high of $725.727 billion in the week ending February 13, marking a sharp surge of $8.663 billion. The Reserve Bank of India (RBI) released this milestone data on Friday, signaling robust economic momentum.
Just a week prior, reserves had dipped by $6.711 billion, largely due to softening gold prices. This week’s rebound showcases a strong recovery across key components. Gold reserves, a critical pillar, jumped $4.990 billion to $128.466 billion, reflecting renewed value in precious metals holdings.
Foreign currency assets (FCA), the largest segment which includes major currencies like the euro, yen, and pound valued in dollars, climbed $3.550 billion to $573.603 billion. Special Drawing Rights (SDRs) with the IMF rose by $103 million to $18.924 billion, while India’s reserve position in the RBI increased $19 million to $4.734 billion.
These reserves act as a vital buffer for India’s economy, helping stabilize the rupee against the dollar during volatile periods. When the rupee faces pressure, the RBI can deploy these funds to intervene in forex markets, preventing sharp depreciations and maintaining exchange rate stability.
The record highs underscore surging dollar inflows from exports, remittances, and foreign investments, bolstering India’s global trade competitiveness. Strong reserves enhance investor confidence, reduce import vulnerabilities, and provide fiscal headroom for policy maneuvers amid global uncertainties like geopolitical tensions and fluctuating commodity prices.
Economists view this as a testament to India’s resilient post-pandemic recovery, with robust service exports and FDI playing key roles. As reserves continue to grow, India solidifies its position among the world’s top forex holders, rivaling powerhouses like China and Japan.