India’s Forex Reserve At Record High, Credit Rating Improved To Stable In Two Decades: PM Modi

Prime Minister Narendra Modi on Saturday announced that India’s foreign exchange reserves have touched a record level. He also said S&P Global Ratings has upgraded India’s long-term sovereign credit rating for the first time in two decades.

Addressing the Economic Times World Leader Forum in New Delhi, PM Modi remarked, “We have missed several buses, but now India has decided we would not only not miss any bus but also take the driving seat.”

India’s forex reserves stood at $695.10 billion as of 15 August 2025. This marks one of the highest levels in the country’s history and strengthens its financial resilience amid global headwinds.

Surge in Forex Assets and Resilience

According to the Reserve Bank of India (RBI), reserves rose by $1.48 billion from the previous week, driven mainly by gains in foreign currency assets. This followed a $4.75 billion rise the week before, indicating strong capital inflows and careful reserve management.

Foreign currency assets, the largest component, climbed by $1.92 billion to $585.90 billion.

Gold reserves fell slightly by $2.16 billion to $86.16 billion, reflecting global price corrections. Special Drawing Rights with the IMF grew by $41 million, while the reserve position with the IMF rose by $15 million to $4.754 billion.

RBI Governor Sanjay Malhotra said the reserves can cover 11 months of imports, a key benchmark of stability. He stressed that India’s external sector is strong, with vulnerability indicators showing consistent improvement.

S&P Upgrade Boosts India’s Global Standing

S&P upgraded India’s rating from ‘BBB-’ to ‘BBB’ with a stable outlook on 14 August 2025. This is the country’s first sovereign upgrade in nearly 20 years.

The short-term rating also moved up to ‘A-2’ from ‘A-3’, while the transfer and convertibility assessment rose to ‘A-’ from ‘BBB+’.

The agency credited India’s robust economic fundamentals, sustained fiscal consolidation, and predictable policies for the decision. It forecasts GDP growth of 6.8 per cent annually over the next three years.

The RBI confirmed that forex reserves have risen by $53 billion so far in 2025. This follows a $20 billion rise in 2024 and a $58 billion gain in 2023, contrasting with the $71 billion fall in 2022.

India’s strong forex reserves now provide a critical buffer against global volatility. Alongside the S&P upgrade, they signal greater investor confidence, lower borrowing costs, and a stronger position in the global financial system.

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