India’s foreign exchange reserves increased by USD 9.905 billion to reach USD 716.907 billion during the week ended August 14, according to data released by the Reserve Bank of India (RBI) on Friday. This follows an increase in the previous reporting week ended August 7, when the overall reserves grew by USD 14.136 billion to USD 707.002 billion.
Prior to these recent gains, reserves had expanded to an all-time high of USD 728.494 billion during the week ended February 27 of this year. Subsequently, the onset of the Middle East conflict led to several weeks of decline as the rupee faced pressure, prompting the RBI to intervene in the forex market through dollar sales.
For the week ended August 14, foreign currency assets—the largest component of the reserves—increased by USD 7.225 billion to USD 581.851 billion, the central bank data showed. Expressed in dollar terms, foreign currency assets include the effects of appreciation or depreciation of non-US units, such as the euro, pound, and yen, held within the reserves.
In an effort to attract more forex flows into the country, the RBI and the government introduced a series of measures last month, including the FCN(B) measure. The country has received USD 56.85 billion under these concessional swap measures up to August 13.
Additionally, the value of gold reserves increased by USD 2.679 billion to USD 111.417 billion during the reporting week. Meanwhile, Special Drawing Rights (SDRs) decreased by USD 5 million to USD 18.74 billion, and India’s reserve position with the International Monetary Fund (IMF) rose by USD 5 million to USD 4.899 billion.
"The steady recovery and growth in India's foreign exchange reserves to over $716 billion reflects sound monetary management by the central bank, especially after navigating pressures earlier in the year due to geopolitical conflicts. For businesses, founders, and investors operating within the Indian ecosystem, a strong foreign exchange reserve provides macroeconomic stability, safeguards against external currency volatility, and supports investor confidence in the broader economy." — Dr. Shishir Gupta, Founder & CEO, StartupLanes
