India’s Forex Reserves Rise $963 Million to $672.59 Billion; Gold Holdings Climb

India’s Forex Reserves: India’s foreign exchange reserves increased by $963 million to $672.59 billion in the week ended June 19, reversing the sharp decline recorded.

in the previous week, according to data released by the Reserve Bank of India (RBI) on Friday. The country’s forex reserves had fallen by $9.99 billion in the preceding reporting week to $671.63 billion, making the latest uptick a welcome recovery.

Gold reserves offset decline in foreign currency assets

The rise in overall reserves was driven primarily by a surge in gold holdings, even as foreign currency assets (FCAs)—the largest component of the forex kitty—declined.

FCAs fell by $3.07 billion to $541.22 billion during the reporting week. These assets, which are denominated in US dollars, are influenced by fluctuations in major global currencies such as the euro, pound sterling and Japanese yen against the dollar.

In contrast, gold reserves jumped by $4.11 billion to $107.93 billion, more than offsetting the decline in foreign currency assets and lifting the overall reserve position.

Meanwhile, Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) declined by $52 million to $18.65 billion, while India’s reserve position with the IMF slipped by $22 million to $4.79 billion.

Strong FPI inflows support external position

The latest reserve data comes amid a surge in foreign investor interest in India’s government bond market.

Foreign portfolio investors (FPIs) have invested nearly Rs 40,000 crore in Indian government securities so far in June, buoyed by policy measures introduced by the RBI and the government to improve the appeal of the domestic debt market.

According to data cited by The Economic Times, FPIs purchased Rs 39,640 crore worth of government bonds during the month, surpassing the previous monthly record of Rs 22,005 crore set in August 2024.

Analysts believe sustained foreign inflows into government securities could strengthen India’s external sector by supporting the balance of payments and helping maintain healthy foreign exchange reserves in the months ahead.