India’s Forex Reserves Decline Slightly But Stay Above $700 Billion

India’s foreign exchange reserves remained above $700 billion for the second straight week, according to data from the Reserve Bank of India (RBI) released on Friday. As of October 4, the reserves stood at $701.18 billion, marking a decline of $3.71 billion from the previous week.

India’s forex reserves, which are at an all-time high, rank as the fourth-largest globally, following China, Japan, and Switzerland. The reserves had surged by nearly $35 billion over the past seven weeks, demonstrating robust growth.

According to the RBI’s Weekly Statistical Supplement, the decline in reserves was primarily due to a reduction in Foreign Currency Assets (FCAs), which fell by $3.51 billion to $612.6 billion. Gold reserves also dipped slightly by $40 million, bringing them to $65.76 billion. Special Drawing Rights (SDRs) dropped by $123 million to $18.43 billion, while the reserve position in the International Monetary Fund (IMF) saw a marginal decrease of $71 million, standing at $4.3 billion.

Despite geopolitical uncertainties, investor confidence in India’s economic potential remains high. Last week, India’s forex reserves exceeded $700 billion for the first time, reaching $704.89 billion, marking the largest weekly increase since mid-July 2023, with a surge of $12.59 billion.

India has now joined an exclusive group of countries with over $700 billion in reserves, alongside China, Japan, and Switzerland. Foreign inflows into India this year have exceeded $30 billion, underscoring the country’s attractiveness to global investors.

Looking forward, experts predict continued growth in India’s forex reserves, which will further solidify the nation’s economic position on the global stage. A strong forex reserve not only boosts investor confidence but also strengthens India’s ability to attract foreign investments and support domestic trade and industry.

Industry analysts also highlight that the combination of strong forex reserves and a sound monetary policy is providing reassurance to both the business community and international investors, even in the face of global geopolitical challenges.