India’s Forex Reserves Climb to $700.9 Billion, Signals Strong External Position

New Delhi: India’s foreign exchange reserves rose by $3.82 billion to reach $700.946 billion for the week ended April 10, according to data released by the Reserve Bank of India.

This marks a steady rebound in the country’s reserves, which had already increased by $9.06 billion in the previous week. Despite recent fluctuations, India remains close to its all-time high reserve level of $728.494 billion recorded in late February.

The earlier dip in reserves was largely attributed to global geopolitical tensions, particularly in the Middle East, which put pressure on the rupee. To stabilize the currency, the central bank had intervened in the forex market by selling dollars.

The latest increase has been driven mainly by a rise in foreign currency assets (FCA)—the largest component of the reserves—which grew by $3.13 billion to $555.983 billion. These assets are influenced not only by dollar holdings but also by movements in other major currencies such as the euro, pound, and yen.

Gold reserves also saw a notable increase, rising by $601 million to $121.343 billion, reflecting both valuation gains and potential accumulation.

Additionally, Special Drawing Rights (SDRs) with the International Monetary Fund went up by $56 million to $18.763 billion. India’s reserve position with the IMF also edged higher by $41 million to $4.857 billion.

A rising forex reserve base is considered a positive indicator for the economy. It strengthens the country’s ability to handle external shocks, supports currency stability, and ensures smoother international trade flows. It also gives the RBI more flexibility to manage volatility in the rupee when needed.

With inputs from IANS