India’s Forex Reserves Rise by $305 Million, Total Hits $654.27 Billion

India’s foreign exchange reserves increased by USD 305 million, reaching USD 654.271 billion in the week ending March 14, according to the latest data from the Reserve Bank of India (RBI).

This follows the previous week’s sharp rise, marking the highest weekly gain in over three years.
Prior to these recent gains, forex reserves had been on a steady decline for nearly four months, touching an 11-month low. The trend has since fluctuated, with alternate weeks of gains and losses.

India's forex reserves had previously hit an all-time high of USD 704.89 billion in September but have since declined by nearly 7%. The drop is attributed to the RBI’s interventions aimed at curbing sharp depreciation of the Rupee, which remains near record lows against the US dollar.

According to RBI data, foreign currency assets (FCA)—the largest component of India's forex reserves—stand at USD 557.186 billion, while gold reserves are valued at USD 74.391 billion.
India’s current forex reserves are estimated to cover approximately 10 to 11 months of projected imports, serving as a crucial buffer against external economic shocks.

In 2023, India added about USD 58 billion to its forex reserves, contrasting with a sharp cumulative decline of USD 71 billion in 2022. In 2024, reserves have seen a modest increase of just over USD 20 billion so far.

Foreign exchange reserves, primarily held in US dollars with smaller allocations in the Euro, Japanese Yen, and Pound Sterling, enable the RBI to manage currency stability. The central bank intervenes in the forex market by purchasing dollars when the Rupee strengthens and selling them when it weakens to prevent excessive volatility.