India’s foreign exchange reserves declined by USD 2.699 billion to USD 687.034 billion in the week ending November 7, according to the Reserve Bank of India’s latest Weekly Statistical Supplement. The fall came on account of a downturn in both foreign currency assets and gold holdings, breaking the brief recovery seen one week earlier.
Even with the decline, the overall forex kitty remains close to its all-time high of USD 704.89 billion, recorded in September 2024, underscoring the strength of India’s external position.
What is driving the latest dip in reserves?
Foreign currency assets – the largest component of reserves – fell by USD 2.454 billion to USD 562.137 billion during the week. Gold reserves also slipped by USD 195 million, bringing total holdings to USD 101.531 billion.
Gold prices have risen sharply in recent months amid heightened global uncertainty, but weekly valuations tend to fluctuate based on currency movements and the price of the metal in global markets.
External stability remains strong despite weekly volatility
The RBI has noted that India’s reserves continue to be adequate to cover more than 11 months of merchandise imports.
In 2023, India added around USD 58 billion to its reserves, in contrast to the USD 71 billion decline recorded in 2022. Reserves rose by a little over USD 20 billion in 2024. So far in 2025, the forex kitty has increased by about USD 37–38 billion.
Foreign exchange reserves typically move due to valuation changes, global currency shifts, RBI’s liquidity management, and cross-border capital flows. The central bank buys dollars when the rupee strengthens and sells when the currency weakens to smooth sharp movements.
Is the rupee bottoming out?
The Indian rupee, which saw persistent weakness earlier this year, may be stabilising. Jefferies said in a recent note that there is a “growing likelihood that the rupee has bottomed”, following months of depreciation that pushed it near Rs 88.7 to the US dollar.
The rupee has been the weakest performer among major emerging market currencies so far this year, declining about 3.4 per cent in 2025. The firm’s commentary suggests the currency may now be approaching a more stable trajectory.
