Key Facts:
Foreign exchange reserves (also called forex reserves or FX reserves) are cash and other reserve assets such as gold and silver held by a central bank or other monetary authority.
Reserves are held in one or more reserve currencies, nowadays mostly the United States dollar and to a lesser extent the euro.
Prime Highlights:
India’s foreign exchange reserves rose to $640.48 billion as of February 21, 2025, marking a two-month high.
Reserves grew by $4.76 billion during the reporting week, reversing a $2.54 billion decline in the previous week.
Key Background:
India’s foreign exchange reserves increased to a two-month high of $640.48 billion as of February 21, 2025, according to data released by the Reserve Bank of India (RBI) on March 3, 2025. This marks a rise of $4.76 billion compared to the previous week, following a decline of $2.54 billion in the preceding week, which was the largest decrease in a month.
A significant contributor to the growth was the rise in foreign currency assets, which grew by $4.25 billion to reach $543.84 billion. This component remains the largest part of India’s forex reserves.
Additionally, gold reserves saw an uptick of $426 million, bringing the total to $74.576 billion for the reporting week. The Special Drawing Rights (SDRs), another important asset class, increased by $73 million to reach $17.971 billion. India’s reserve position with the International Monetary Fund (IMF) also saw a modest rise, up by $7 million to stand at $4.09 billion.
The increase in India’s forex reserves highlights the country’s strengthened external position, offering a cushion against potential global economic uncertainties. The growth is attributed to a combination of factors, including a robust current account surplus and foreign inflows, providing the country with a comfortable reserve buffer. As of the latest data, the reserves remain at a healthy level, providing India with sufficient protection against external shocks and supporting its currency stability in global markets.
