India’s Forex Reserves: A Steady Climb Amid Global Economic Shifts

India’s foreign exchange reserves rose by $1.983 billion to $688.129 billion for the week ending April 25, marking the eighth consecutive week of growth, per RBI data. This increase was driven by a $2.168 billion rise in foreign currency assets (FCAs), offsetting a $207 million decline in gold reserves. Year-on-year, reserves grew by $50.21 billion, underscoring India’s strong external position. With consistent growth across key components, India’s reserves serve as a buffer against global economic uncertainties, ensuring robust financial stability.

India's foreign exchange reserves have continued their upward trajectory, marking the eighth consecutive week of growth. According to data released by the Reserve Bank of India (RBI) for the week ending April 25, the reserves saw an increase of $1.983 billion, bringing the total to $688.129 billion. This follows a robust surge of $8.31 billion in the previous week. Despite this consistent rise, the reserves remain below the record high of $704.885 billion achieved in late September 2024.

Breakdown of Reserve Movements

Foreign currency assets (FCAs), which constitute the largest share of the reserves, were the primary driver of the increase. FCAs grew by $2.168 billion to reach $580.663 billion. These assets, denominated in U.S. dollars, also account for the valuation impact of other currencies such as the euro, yen, and pound in the reserves.

Conversely, gold reserves experienced a decline of $207 million, settling at $84.365 billion. Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) saw a modest increase of $21 million, totaling $18.589 billion. Additionally, India’s reserve position with the IMF rose slightly by $2 million to $4.512 billion.

Government Borrowings and Loans

In a noteworthy development, the RBI reported no outstanding loans or advances to the central government during the week. However, loans and advances to state governments dropped significantly to ₹22,324 crore, compared to ₹36,792 crore the previous week. Despite this decline, the figure remains notably higher than the ₹13,284 crore recorded during the same period last year.

Growth Since March 2025

Since the end of March 2025, forex reserves have grown by ₹1.67 lakh crore ($19.80 billion). This growth has been driven primarily by a ₹1.10 lakh crore ($13.11 billion) increase in FCAs. Gold holdings also contributed significantly, rising by ₹52,623 crore ($6.19 billion). SDRs and the IMF reserve position saw smaller increases of ₹3,528 crore ($420 million) and ₹755 crore ($88 million), respectively.

Year-on-Year Comparison

On an annual basis, the reserves have expanded by ₹5.61 lakh crore ($50.21 billion) compared to April 26, 2024. FCAs grew by ₹2.95 lakh crore ($20.96 billion), while gold reserves surged by ₹2.57 lakh crore ($28.83 billion). SDRs and the IMF reserve position saw increases of ₹8,378 crore ($540 million) and declines of ₹51 crore ($127 million), respectively.

Context and Clarity

The RBI has clarified that FCAs exclude holdings of SDRs and do not account for investments in IIFC (UK) bonds or funds lent under the SAARC and ACU currency swap arrangements. This ensures that the figures accurately reflect the liquidity readily available to India in foreign currency.

Strengthening India’s Economic Buffer

The steady rise in forex reserves underscores India's robust external position and serves as a buffer against global economic uncertainties. With year-on-year and month-on-month growth across key components, the reserves highlight the country's resilience in navigating a volatile global financial landscape.