India's foreign exchange reserves remain at comfortable levels despite recent global economic uncertainties, with the country's forex stockpile standing at $682.3 billion as of May 29, 2026, according to Reserve Bank of India (RBI) Governor Sanjay Malhotra.

Announcing the RBI's second bi-monthly monetary policy for FY27, Malhotra said the country's reserves continue to provide a strong buffer against external shocks and are adequate across key reserve adequacy metrics, including import coverage and external debt obligations.

Key Highlights

• India's forex reserves stood at $682.3 billion, providing import cover for nearly eleven months.
• RBI says strong reserves and reforms will support stability amid global economic uncertainties.

Strong Reserve Position Supports Economic Stability

The RBI Governor noted that India's foreign exchange reserves are sufficient to cover approximately 11 months of imports, highlighting the country's resilience amid ongoing geopolitical tensions, volatile energy markets, and global trade uncertainties.

"As of May 29, 2026, India's foreign exchange reserves stood at a healthy $682.3 billion, providing import cover for about 11 months and covering nearly 89.1% of external debt," Sanjay Malhotra said.

He emphasized that while the reserves serve as a significant safeguard against external vulnerabilities, the central bank also has a broad range of regulatory and market-based tools at its disposal to maintain orderly market conditions whenever required.

The Governor reaffirmed the RBI's commitment to preserving financial stability and ensuring smooth functioning of foreign exchange markets in the face of global uncertainties.

Policy Reforms Expected to Strengthen External Sector

Malhotra highlighted several recent policy measures that are expected to support India's balance of payments position over the medium term.

These include trade agreements with key international partners, the decision to allow 100% foreign direct investment (FDI) in the insurance sector, continued progress under the ethanol blending programme, initiatives supporting India's energy transition goals, easing of investment restrictions for land-bordering countries, and further liberalisation of the External Commercial Borrowing (ECB) framework.

According to the RBI, these reforms are expected to attract capital inflows, improve investment activity, and strengthen India's external sector fundamentals.

Forex Reserves Decline From Record Highs

India's foreign exchange reserves have moderated from their record high level of $728.49 billion recorded in February 2026. The decline followed heightened geopolitical tensions in West Asia, which triggered pressure on the Indian rupee and prompted RBI interventions in the foreign exchange market through dollar sales.

During the week ended May 22, 2026, the country's forex reserves declined by $7.51 billion to $681.38 billion. Despite the recent moderation, economists continue to view India's reserve position as one of the strongest among emerging market economies.

Also Read: India's Forex Reserves Fall to Over One-Year Low as RBI Defends Rupee

Current Account Risks Remain on Watch

While expressing confidence in India's external sector resilience, Malhotra cautioned that elevated energy prices and persistent trade-related uncertainties could pose upside risks to the country's current account deficit during FY27.

However, he noted that a strong services trade surplus and healthy inward remittance flows are expected to provide important support to the external account.

The RBI Governor also reiterated the central bank's commitment to maintaining adequate liquidity in the banking system to support productive economic activity and ensure effective transmission of monetary policy.

As global economic conditions remain uncertain, India's strong reserve buffer, policy reforms, and robust services exports are expected to play a crucial role in safeguarding macroeconomic stability and supporting long-term growth.