India’s foreign exchange (forex) reserves fell for the fifth consecutive week, slipping to $726 billion in the week ended October 9. The fall is driven by a 1.18 per cent decline in foreign currency assets (FCAs) and a 1.24 per cent slide in gold value—these two components together account for 97 per cent of the forex reserves. Gold has emerged as an important component of the reserves, with its share nearly tripling from 6.67 per cent in 2019 to 17.1 per cent as of August 2026, while FCAs account for about 80 per cent. The rise in gold’s share is largely driven by the surge in global gold prices, which have more than tripled since 2019 to $4,324.7 per troy ounce (31.1034768 grams) as of September 30, 2026. However, gold reserves have swung both ways and their month-on-month (M-o-M) fluctuations in $ value are much sharper than those of FCAs. Since April 2019, gold’s sharpest monthly moves were a 21.5 per cent surge in January 2026 and a 13.76 per cent fall in March 2026.
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