Reserve Bank of India data shows India’s foreign exchange reserves at $698.3 billion on September 5. The reserves are close to the record high of $704.9 billion. Weekly, forex reserves increased by $4 billion due to rising gold prices. Foreign exchange assets rose by $540 million to $584 billion. The value of gold reserves, which have a 13% share in total reserves, jumped by $3.5 billion compared to the previous week. At the current level, the reserves are shy of $6.6 billion from the record high of $704.9 billion reached in late September 2024.

India’s foreign exchange reserves have surged to near-record levels, with gold emerging as a critical stabilizer. The sharp rise in gold reserves is cushioning India’s external position against dollar volatility, a timely outcome amid global inflation and geopolitical uncertainty.

At the current level, reserves provide over 11 months of import cover, significantly above global adequacy norms, reducing vulnerability to oil shocks and capital outflows. This strong buffer reinforces macroeconomic resilience and bolsters confidence among global investors.

For the rupee, robust reserves ensure the RBI retains ample capacity to manage volatility, even in the face of shifting U.S. monetary policy. With reserves just $6.6 billion shy of the all-time high, sustained gold strength and steady portfolio inflows could push India to fresh peaks, cementing its position as one of the world’s largest reserve holders.