India's forex reserves down by $5.6B to $689.7B
What's the story
India's foreign exchange reserves have witnessed a significant decline of $5.623 billion, now standing at $689.733 billion. The fall is mainly attributed to a decline in foreign currency assets and gold holdings, according to the latest data from the Reserve Bank of India (RBI). Despite this dip, the country's reserves remain strong enough to cover over 11 months of merchandise imports.
Asset drop
Major decline in foreign currency assets and gold reserves
The decline in India's forex reserves is largely due to a fall in foreign currency assets and gold reserves. The former, which is the biggest component of the reserves, fell by $1.957 billion to $564.591 billion. Meanwhile, gold reserves witnessed a sharper decline of $3.810 billion, now standing at $101.726 billion. The price of gold has been rising steadily amid global uncertainties and strong investment demand over recent months.
External stability
RBI assures forex reserves sufficient for merchandise import payments
Despite the recent decline, RBI Governor Sanjay Malhotra has assured that India's forex reserves are enough to cover over 11 months of merchandise imports. He made this statement after the central bank's latest monetary policy review meeting. The assurance comes as a relief amid global uncertainties and economic challenges, indicating that India can comfortably meet its external obligations.
Reserve growth
Forex reserves have grown steadily over the years
Historically, India's forex reserves have grown steadily over the years. In 2023, the country added some $58 billion to its reserves, reversing a cumulative decline of $71 billion in 2022. The trend continued in 2024 with an addition of just over $20 billion. So far in 2025, the reserves have increased by around $40 billion. This steady growth highlights India's resilience amid global economic fluctuations and uncertainties.