India’s Forex Reserves Fall $6.71 Billion to $717.06 Billion; Gold Reserves See Sharp Drop, Says RBI
India’s foreign exchange reserves declined by $6.71 billion to $717.06 billion for the week ended February 6, according to the latest data released by the Reserve Bank of India (RBI). The fall comes after the country’s forex reserves touched a record high in the previous week.
The decline was largely driven by a significant drop in gold reserves, even as foreign currency assets (FCA) posted gains during the same period.
Gold Reserves Lead the Decline
RBI data showed that gold reserves fell by $14.208 billion to $123.476 billion, contributing the most to the overall drop in forex reserves.
In contrast, foreign currency assets (FCA) — the largest component of the country’s forex reserves — rose by $7.661 billion to $570.053 billion for the week under review.
Despite the weekly dip, India’s forex reserves remain close to historic highs. Just a week earlier, the reserves had surged to an all-time high of $723.774 billion, reflecting strong capital flows and stable external conditions.
India’s External Sector Remains Resilient
Following its recent monetary policy review, the RBI stated that India’s foreign exchange reserves are sufficient to cover more than 11 months of merchandise imports. The central bank emphasized that the country’s external sector remains resilient and that it is well-positioned to meet external financing requirements comfortably.
Strong Growth in Forex Reserves Over Recent Years
India’s forex reserves have shown steady improvement in recent years:
- In 2025, reserves increased by around $56 billion so far.
- In 2024, reserves rose by just over $20 billion.
- In 2023, India added approximately $58 billion to its forex reserves.
- In 2022, reserves had declined by nearly $71 billion amid global economic pressures.
This trend highlights the country’s improving external stability and stronger macroeconomic fundamentals.
What Are Forex Reserves?
Foreign exchange reserves are assets held by a country’s central bank in reserve currencies. These typically include the US dollar, along with smaller holdings in the Euro, Japanese Yen, and Pound Sterling.
The RBI actively manages forex reserves to maintain currency stability. It intervenes in the foreign exchange market by buying dollars when the rupee strengthens and selling dollars when it weakens, helping to prevent sharp volatility in the Indian rupee.
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