Record Weekly Increase Boosts India’s Reserves to $653.97 Billion
India’s foreign exchange reserves witnessed a remarkable surge, increasing by a substantial USD 15.26 billion in the week ending March 7, 2025. This sharp rise brings the country’s total reserves to USD 653.97 billion, reinforcing India’s economic strength. The surge comes after a decline of USD 1.78 billion in the previous week, making this the most significant weekly increase in recent months. Notably, the jump in India’s reserves is nearly equivalent to the total foreign exchange reserves of Pakistan, highlighting a stark contrast in economic positioning between the two neighboring countries.
Significant Rise in Foreign Exchange Reserves
According to the latest data released by the Reserve Bank of India (RBI), the substantial increase in reserves follows fluctuations in global financial markets and favorable currency inflows. This marks a significant recovery after the previous week’s decline, positioning India on a stronger footing in managing its external economic engagements. The reserves are now approaching their peak level of USD 704.89 billion, which was recorded on September 27, 2024.
The increased reserves bolster India’s ability to maintain economic stability, manage inflation, and ensure adequate liquidity for international trade. The surge in foreign exchange holdings also enhances investor confidence, further strengthening the rupee against global currencies.
Foreign Currency Assets and Gold Reserves on the Rise
A closer analysis of the RBI data reveals that India’s Foreign Exchange Reserves Currency Assets (FCA), a major component of forex reserves, grew by USD 13.93 billion in the reviewed week. This increase has pushed FCA holdings to USD 557.28 billion, reflecting improved foreign investments and a positive economic outlook. The FCA accounts for various global currencies, including the Euro, Pound Sterling, and Yen, with their valuation adjusted to USD.
In addition to FCA, India’s gold reserves also experienced a notable rise. The RBI reported that gold reserves increased by USD 1.05 billion, bringing the total value to USD 74.33 billion. The rise in gold reserves contributes to India’s overall financial security, serving as a hedge against market volatility.
India’s Foreign Exchange forex reserves, comprising foreign currency assets, gold reserves, Special Drawing Rights (SDRs), and the reserve position in the International Monetary Fund (IMF), play a crucial role in ensuring financial stability. The recent surge reflects India’s strong macroeconomic fundamentals and resilient economic policies. With sustained growth in reserves, India is well-positioned to navigate global economic uncertainties while maintaining robust financial health.
