India’s Forex Reserves Surge to $695.11 Billion

India’s foreign exchange reserves rose by $1.49 billion, reaching $695.11 billion for the week ending August 15, according to data released by the Reserve Bank of India (RBI) on Friday.

This comes after a sharp $4.75 billion rise in the previous week, when reserves touched $693.62 billion. Analysts say the steady increase reflects India’s stable external balance position.

Higher forex reserves provide the RBI greater flexibility to stabilize the rupee against the US dollar. By tapping into reserves, the central bank can release dollars into the market, preventing excessive volatility and shielding the rupee from sharp depreciation.

For the reporting week, foreign currency assets, the largest component of reserves, climbed by $1.92 billion to $585.9 billion. These assets are expressed in dollar terms but also capture changes in the value of currencies such as the euro, pound, and yen held in the reserves.

The gold component stood at $85.67 billion, underscoring its growing importance as a safe-haven asset. Since 2021, RBI’s share of gold in total forex reserves has nearly doubled, in line with global central banks that are boosting gold holdings amid heightened geopolitical uncertainty.

The reserves also include Special Drawing Rights (SDRs) worth $18.78 billion.

With this level, India’s forex reserves are sufficient to cover more than 11 months of goods imports and about 96 per cent of external debt, RBI Governor Sanjay Malhotra recently highlighted. “Overall, India’s external sector remains resilient as key vulnerability indicators continue to improve. We are confident of meeting external financing requirements,” he said.

Meanwhile, India’s merchandise exports showed strong momentum, rising 7.29 per cent to $37.24 billion in July 2025 compared with $34.71 billion in July last year. Commerce Secretary Sunil Barthwal noted that despite global uncertainties, India’s services and merchandise exports have outperformed global trade growth so far in FY26.

Key drivers of exports in July included engineering goods, electronic products, pharmaceuticals, chemicals, gems, and jewellery, reflecting the broad-based strength of India’s external trade sector.

[Except for the headline, this article has not been edited by the Benefit News editorial team and is published directly from the IANS news feed]