India Shines Bright: Forex Reserves Surge Over $702 Billion Amid Bullion Boom

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India’s foreign exchange reserves crossed $702 billion, surging by $4.5 billion driven mainly by a record increase in gold reserves. While foreign currency assets fell, the boost in gold holdings cushioned the impact, underscoring RBI’s strategic reserve management amid global uncertainties and strengthening economic resilience.

India's foreign exchange reserves rose sharply by $4.5 billion, crossing the $702 billion milestone for the week ended October 17, 2025. This significant uptick was primarily propelled by a record surge in gold reserves amid a rally in global bullion prices and increased central bank acquisitions. The rise reflects India’s strategic moves to strengthen macroeconomic stability amid global uncertainties.

The Reserve Bank of India (RBI) data revealed that while foreign currency assets—the largest component of the reserves—declined by $1.7 billion to $570.4 billion due to valuation changes in currencies like the euro, pound, and yen, the gold reserves saw a historic jump of $6.18 billion. Gold holdings now stand at over $108.5 billion, the highest level ever recorded for India, bolstered by both increased global gold prices and recent bullion purchases by the RBI. The growth in the gold component helped offset declines in other assets, maintaining the overall reserves at a robust level.

Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) edged up marginally by $38 million to $18.7 billion, while India's reserve position with the IMF saw a minor dip of $30 million to $4.6 billion. Over the past decade, the share of gold in India's foreign exchange reserves nearly doubled from below 7% to almost 15%, the highest proportion since the late 1990s, highlighting the growing importance of gold as a strategic asset.

This boost in reserves enhances India’s ability to manage external shocks, stabilize the rupee, and support import cover amidst volatile global economic conditions. Geopolitical tensions in the Middle East, trade uncertainties, and rising inflation have driven global demand for gold, positioning it as a safe haven asset. The RBI's accumulation of nearly 75 tonnes of gold since 2024 has played a key role in this strengthening of reserves.

Key Highlights:

India’s forex reserves increased by $4.5 billion to $702.28 billion for the week ended October 17.
Gold reserves surged by $6.18 billion to cross $108.5 billion, the highest ever recorded.
Foreign currency assets declined by $1.7 billion to $570.4 billion due to currency valuation changes.
Special Drawing Rights increased slightly to $18.7 billion; IMF reserve position decreased marginally.
Gold’s share in forex reserves has nearly doubled in the past decade, reaching nearly 15%.
RBI’s gold purchases and global bullion price rises underpin the surge in gold reserves.
Strong forex reserves provide economic stability amid geopolitical and inflationary pressures.

Sources: Reserve Bank of India, IANS, Economic Times, Financial Express, DD News

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