India’s forex reserves rose by $3.51 billion to reach $694.23 billion for the week ending 29 August, according to data released by the Reserve Bank of India (RBI) on Friday.
Foreign currency assets, the largest portion of the reserves, increased by $1.69 billion to $583.94 billion. These assets reflect changes in non-US currencies such as the euro, pound, and yen, as held by the RBI.
The gold reserves also grew significantly, rising by $1.77 billion to $86.77 billion.
Global central banks, including the RBI, have continued to accumulate gold as a safe-haven asset due to ongoing geopolitical uncertainties.
RBI Gains Buffer to Manage Rupee Volatility
Special Drawing Rights (SDRs) rose by $40 million during the week, reaching $18.78 billion.
With the increase in forex reserves, the RBI now has greater room to stabilise the rupee against the US dollar. The central bank can intervene in both spot and forward currency markets to curb volatility and protect the currency from sharp fluctuations.
RBI Governor Sanjay Malhotra stated that India’s reserves are now enough to cover over 11 months of goods imports and around 96 per cent of the country’s outstanding external debt.
“Our external sector remains resilient as key vulnerability indicators continue to improve. We are confident of meeting our external financing needs,” he said.
Exports Show Strong Growth in July
India’s merchandise exports grew by 7.29 per cent to $37.24 billion in July, compared to $34.71 billion in the same month last year. This signals a strengthening of the external sector.
Commerce Secretary Sunil Barthwal said India’s services and merchandise exports have shown strong growth in FY26, outpacing global trends despite policy uncertainty worldwide.
He noted that key drivers of goods exports in July included engineering goods, electronics, pharmaceuticals, chemicals, and gems and jewellery.
India’s growing forex reserves and robust export performance underscore the continued stability and resilience of its external sector.
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