India's forex reserve increased by $2.49 billion to $719.547 billion in the week ended November 6. The Reserve Bank of India (RBI) released the latest data on Friday. The increase followed a decline of $2.691 billion in the previous week, when total reserves fell to $717.056 billion.
The latest growth was largely driven by a sharp rise in gold reserves. Foreign currency assets also recorded an increase during the reporting week.
Key Highlights
- India's forex reserve increased by $2.49 billion to $719.547 billion.
- Gold reserves surged by $2.205 billion to $104.796 billion.
- Foreign currency assets rose by $232 million to $591.350 billion.
Gold Reserves Drive Weekly Increase
According to the RBI data, foreign currency assets, the largest component of India's forex reserve, increased by $232 million to $591.350 billion during the week ended November 6.
These assets include the impact of appreciation or depreciation in non-US currencies held in the country's foreign exchange reserves. Such currencies include the euro, British pound, and Japanese yen. Their movements against the US dollar affect the reported value of foreign currency assets.
Gold reserves recorded a much sharper increase during the week. Their value rose by $2.205 billion to $104.796 billion, making gold the biggest contributor to the overall weekly increase.
The central bank also reported a rise in other reserve components. Special Drawing Rights (SDRs) increased by $52 million to $18.610 billion. Meanwhile, India's reserve position with the International Monetary Fund (IMF) rose by $1 million to $4.791 billion.
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Forex Reserves Remain Below Record High
Despite the latest increase, India's forex reserve remains significantly below its all-time high of $785.706 billion, recorded during the week ended September 4.
The record level was supported by substantial foreign currency inflows through a special concessional swap arrangement for diaspora deposits. Through this arrangement, banks raised a record $133 billion.
However, reserves have been on a declining trend since reaching that peak. The latest weekly increase offers some recovery after the previous week's decline.
Foreign exchange reserves are an important financial buffer for India. They help the country manage external payment obligations, support currency stability, and strengthen confidence in its economy.
The latest RBI figures indicate a modest recovery, supported mainly by higher gold valuations and a smaller increase in foreign currency assets.
