India’s foreign exchange reserves rose sharply by $3.293 billion to $696.61 billion in the latest reporting week, according to data released by the Reserve Bank of India (RBI). In the previous week, the overall reserves had increased by $4.368 billion to $693.318 billion.
The RBI noted that foreign currency assets (FCAs), expressed in dollar terms, also reflect the impact of appreciation or depreciation of non-US currencies such as the euro, pound and yen, which form part of the reserves basket.
Segment-wise movement
For the week ended December 26, foreign currency assets—the largest component of the reserves—rose by $184 million to $559.612 billion, RBI data showed.
Meanwhile, the value of gold reserves recorded a strong jump of $2.956 billion, taking the total to $113.32 billion. In the preceding week, gold reserves had increased by $2.623 billion to $110.365 billion, aided by rising global bullion prices.
India’s Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) increased by $60 million to $18.803 billion, compared with a marginal rise of $8 million in the previous week.
The country’s reserve position with the IMF also strengthened, climbing $93 million to $4.875 billion, following an increase of $95 million a week earlier.
Rupee pressure in 2025
Managing currency volatility remained a key challenge for the RBI in 2025 as the rupee breached the 90-per-dollar mark. While the central bank maintains that it intervenes only to curb excessive volatility and not to defend a specific level, it sold over $38 billion in foreign exchange during the first nine months of the year to stabilise the domestic currency.
RBI Governor Sanjay Malhotra has highlighted India’s forex reserves above $690 billion and a manageable current account deficit as major buffers for the economy. However, market experts believe that sharp currency swings could keep the rupee a challenging variable for policymakers in the near term.
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