India’s foreign exchange reserves have witnessed a notable recovery, rising by 1.32 per cent to reach $697.121 billion as of April 3, according to data released by the Reserve Bank of India (RBI). The reserves increased by approximately $9.063 billion during the week, marking a significant turnaround.
This comes after a sharp decline in the previous week ending March 27, when reserves had dropped by $10.288 billion to $688.058 billion. The latest surge is therefore being seen as a strong corrective movement.
Near record levels despite recent volatility
Earlier this year, in the week ending February 27, India’s forex reserves had touched an all-time high of $728.494 billion. However, the onset of conflict in West Asia led to sustained pressure, causing reserves to decline over several consecutive weeks.
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The geopolitical tensions also weighed on the Indian rupee, prompting the RBI to intervene in the currency market by selling dollars to stabilise the situation. Additional policy measures were also undertaken during this period.
Foreign currency assets show modest increase
Foreign currency assets (FCA), the largest component of forex reserves, rose by $1.784 billion to $552.856 billion in the week ending April 3. This component reflects the impact of fluctuations in major non-dollar currencies such as the euro, pound, and yen.
Gold reserves see sharp jump
Gold reserves recorded a significant increase, rising by $7.221 billion to reach $120.742 billion. The surge in gold holdings contributed substantially to the overall rise in forex reserves during the week.
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Special Drawing Rights (SDR) increased marginally by $58 million to $18.707 billion. Meanwhile, India’s reserve position with the International Monetary Fund (IMF) remained unchanged at $4.816 billion.
Experts view this rebound in forex reserves after weeks of decline as a positive indicator for India’s economic outlook. The recovery suggests improved external stability and reinforces confidence in the country’s financial position amid global uncertainties.
