MUMBAI— India’s foreign exchange reserves climbed by $4.75 billion to $693.62 billion for the week ending August 8, according to data released Friday by the Reserve Bank of India (RBI).
The surge in reserves signals stronger macroeconomic fundamentals and provides the RBI with more leeway to stabilize the rupee against the U.S. dollar. A robust forex position enables the central bank to step into spot and forward currency markets, releasing dollars to prevent sharp depreciation of the rupee and curb volatility.
For the week in review, foreign currency assets — the largest component of the reserves — rose by $2.84 billion to $583.98 billion. These figures, expressed in U.S. dollar terms, also reflect valuation changes in non-dollar assets such as the euro, pound, and yen.
The gold component of reserves saw a notable increase of $2.16 billion, reaching $86.16 billion. Central banks worldwide have been ramping up gold holdings as a safe-haven asset amid geopolitical tensions, and the RBI’s share of gold in total reserves has nearly doubled since 2021.
Special Drawing Rights (SDRs) held steady at $18.74 billion.
RBI Governor Sanjay Malhotra recently noted that India’s reserves are sufficient to cover over 11 months of goods imports and about 96% of its outstanding external debt.
“Overall, India’s external sector remains resilient as key external sector vulnerability indicators continue to improve. We remain confident of meeting our external financing requirements,” Malhotra said.
Meanwhile, India’s merchandise exports rose 7.29% in July to $37.24 billion, up from $34.71 billion in the same month last year, according to official trade data released Thursday. Commerce Secretary Sunil Barthwal said the growth highlights the strength of India’s external sector despite a challenging global environment.
“Despite an uncertain global policy environment, India’s services and merchandise exports in July and in FY26 so far have grown substantially, and are much higher than the global exports growth,” Barthwal noted. Key export drivers in July included engineering goods, electronics, pharmaceuticals, chemicals, and gems and jewelry. (Source: IANS)
