The country’s forex reserves hit all-time high of $704.89 billion, up a whopping $12.5 billion in the week to September 27, the Reserve Bank said on Friday, something that can assuage a fraught market following the heightened tension in the Middle East.
With this, the RBI has amassed a whopping $113 billion to the reserves in the 12 months period ending September 27. The $12.5 billion accretion is the largest weekly addition so far. In comparison, this is nearly three times the GDP of Pakistan and makes it the world’s fourth largest.
The massive rise in reserves was led by a surge in foreign currency assets and gold reserves, while Special Drawing Rights (SDRs) increased and the IMF reserve position saw a slight dip. The RBI continues to intervene to manage market stability. In the previous reporting week the reserves stood at $692.3 billion. The massive jump has Wall Street brokerage Bank of America Securities forcasting the reserves to touch $750 billion by March 2026.
“The foreign exchange reserves will likely rise to $745 billion by March 2026, giving the central bank more potential firepower to influence the rupee,” BofA said in a note earlier in the day, adding the monetary authority “seems relaxed about holding larger forex reserves, owing to its desire to build buffers against contingent external risks.
India has the world’s fourth-biggest foreign reserves as rising overseas inflows into the nation’s stocks and bonds have helped the Reserve Bank boost its stockpile to a record high. The amount provides stability to the rupee against external shocks, with the RBI using its reserves to limit extreme swings in the currency hovering near a record low, BofA said.
According to the weekly statistical supplement released by the RBI, foreign currency assets were up by $10.4 billion to $616 billion. Expressed in dollar terms, foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.