India’s foreign exchange reserves declined by $1.8 billion to settle at $686.2 billion for the week ending 28 November, 2025, according to the latest weekly data released by the Reserve Bank of India (RBI).
This decrease follows a prior drop of $4.4 billion in the previous reporting week (November 21), which had brought the total kitty down to $688.1 billion, the official report noted. This slump was driven by a decrease in both foreign currency assets and gold reserves.
Over the past many weeks, the forex kitty has been largely in a downtrend.
Breakdown of reserve components
A significant factor in the overall decline of the kitty was the foreign currency assets (FCA), the largest component of the reserves. FCA decreased by $3.5 billion to $557 billion during the latest reporting week, as per the RBI’s ‘Weekly Statistical Supplement’ data.
Gold Reserves witness an increase
In contrast to the decline in foreign currency assets, India’s gold reserves recorded an increase. They grew by $1.6 billion, reaching a total value of $105.7 billion during the current reporting week, the central bank said.
The price of the safe-haven asset gold has been on a sharp uptrend over recent months amid heightened global uncertainties and robust investment demand, ANI reported.
The central bank of any nation also holds the authority to increase or reduce its gold reserves depending on many factors, including economic uncertainty and geopolitical tensions.
Apart from gold reserves, two other aspects of holdings contribute to the nation’s foreign exchange arsenal. Special Drawing Rights (SDRs) and the Reserve position in the International Monetary Fund (IMF) are the two additional holdings which the central banks keep to contribute to the nation’s forex reserves.
According to the official data release, India’s SDRs increased by $63 million to $18.62 billion. Additionally, India’s reserve position with the IMF also increased by $16 million, settling at $4.7 billion in the reporting week, as per data.
What are foreign exchange reserves?
Foreign exchange reserves, or FX reserves, are assets held by a nation’s central bank or monetary authority, primarily in reserve currencies such as the US dollar, with smaller portions in the Euro, Japanese Yen, and Pound Sterling.
India added around $58 billion to its foreign exchange reserves in 2023, contrasting with a cumulative decline of $71 billion in 2022. Whereas, in 2024, the reserves rose by a little over $20 billion.
As of 2025, the forex kitty has cumulatively increased by approximately $48 billion, according to the data.
The RBI often steps in to manage liquidity, including selling dollars, to prevent a sharp decline of the rupee. The RBI strategically buys dollars when the Rupee is strong and offloads them when the currency weakens.
