New Delhi: India’s foreign exchange reserves declined by $6.711 billion to $717.064 billion for the week ended February 6, according to the latest data released by the Reserve Bank of India.
The drop comes after the country’s forex reserves had climbed to a record high of $723.774 billion in the previous week. Despite the recent fall, the overall trend in recent weeks has largely been upward.
Gold Reserves Drag Overall Position
The primary reason behind the decline was a sharp reduction in gold reserves. RBI data showed that gold holdings stood at $123.476 billion, registering a weekly fall of $14.208 billion.
In contrast, foreign currency assets (FCA)—the largest component of the forex reserves—rose by $7.661 billion to reach $570.053 billion during the same period. FCAs typically include assets denominated in major global currencies such as the US dollar, euro, Japanese yen and pound sterling.
External Sector Remains Stable
Following its latest monetary policy review earlier this month, the RBI stated that India’s external sector continues to remain resilient. The central bank noted that the country’s reserves are adequate to cover more than 11 months of merchandise imports and expressed confidence in meeting external financing needs comfortably.
Data trends indicate that India’s forex reserves have grown by around $56 billion so far in 2025. In comparison, the reserves increased by just over $20 billion in 2024 and by approximately $58 billion in 2023. This contrasts with 2022, when reserves had declined cumulatively by about $71 billion.
RBI’s Market Interventions
Foreign exchange reserves are assets maintained by a country’s central bank to manage currency stability and external shocks. The RBI actively intervenes in currency markets by managing liquidity—buying dollars when the rupee strengthens and selling them when it weakens—to prevent excessive volatility.
Despite the weekly dip, India’s forex buffer remains robust by historical standards.
