India’s Forex Reserves Climb To $658.8 Billion; Highest In Four Months

According to data released by the Reserve Bank of India (RBI) on Friday, India’s foreign exchange reserves jumped by $4.5 billion to reach $658.8 billion in the week ending 28 March 2025, marking a four-month high.

As per the central bank’s Weekly Statistical Supplement, foreign currency assets (FCAs) – the largest component of the reserves – dipped by $1.6 billion to $558.86 billion.

Changes in the value of non-dollar currencies such as the euro, yen, and pound influence these assets.

Meanwhile, gold reserves surged by $2.8 billion to $77.2 billion, contributing significantly to the overall increase.

In the previous week that ended 14 March, India’s reserves had grown by $305 million to reach $654.27 billion.

This marks the third straight week of gains, following recent declines attributed to currency revaluation and the RBI’s market interventions aimed at curbing rupee volatility.

India’s forex reserves had previously hit a record high of $704.89 billion in September 2024.

A growing reserve base strengthens the rupee and allows the RBI greater flexibility to intervene in currency markets during turbulent phases.

In contrast, falling reserves limit the central bank’s capacity to stabilize the rupee.

On the trade front, India’s merchandise trade deficit narrowed sharply in February to $14.05 billion – the lowest in over three years – from $22.99 billion in January.

According to the Ministry of Commerce and Industry, the improvement was driven by stable export performance and a notable dip in imports.

February exports rose 1.3% to $36.91 billion from $36.43 billion in January, while imports declined by 16.3% to $50.96 billion from $59.42 billion.

The developments indicate growing resilience in India’s external sector, even as global economic uncertainty continues due to ongoing geopolitical tensions.

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