India’s Forex Reserves Rise $938 Million to $682.3 Billion; Foreign Currency Assets Climb $3.1 Billion | Economy News
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While foreign currency assets rise, the value of gold reserves during the week ended May 29 declined by $2.186 billion to $112.6 billion.
India’s Latest Forex Reserves.
India’s foreign exchange reserves increased by $938 million to $682.321 billion during the week ended May 29, according to data released by the Reserve Bank of India (RBI) on Friday. The increase comes after a sharp decline of $7.511 billion in the previous week, when the reserves had fallen to $681.384 billion.
The country’s forex reserves had touched an all-time high of $728.494 billion in the week ended February 27, 2026. However, reserves came under pressure in subsequent weeks amid geopolitical tensions in West Asia and RBI intervention in the foreign exchange market to support the rupee through dollar sales.
Foreign Currency Assets Drive the Increase
The latest rise in reserves was mainly driven by an increase in foreign currency assets (FCAs), which climbed by $3.116 billion to $546.148 billion.
FCAs form the largest component of India’s forex reserves. Their value fluctuates not only because of RBI interventions but also due to changes in the valuation of non-US currencies such as the euro, pound sterling and Japanese yen held in the reserve portfolio.
Gold Reserves Decline
While foreign currency assets rose, the value of gold reserves declined by $2.186 billion during the reporting week to $112.6 billion.
The RBI data showed that Special Drawing Rights (SDRs) remained unchanged at $18.747 billion.
India’s reserve position with the International Monetary Fund (IMF) increased marginally by $8 million to $4.826 billion.
RBI Governor Says Reserves Adequate Against External Risks
Announcing the second bi-monthly monetary policy of FY27, RBI Governor Sanjay Malhotra said India’s reserve position remains comfortable and provides a strong cushion against global uncertainties.
“As of May 29, 2026, India’s foreign exchange reserves stood at a healthy USD 682.3 billion, adequate in terms of the standard metrics of reserve adequacy, including import cover (for about 11 months) and external debt (89.1 per cent),” he said.
Malhotra emphasized that the RBI has sufficient resources and policy tools to deal with any external shock or excessive volatility in financial markets.
“While our foreign exchange reserves provide a strong buffer against external shocks, we have a broad range of regulatory and market-based instruments to respond effectively as may be required. In this regard, we remain vigilant and are fully prepared to do whatever it takes to preserve orderly market conditions,” he said.
Policy Measures Expected to Support External Sector
The RBI Governor highlighted several policy initiatives that are expected to strengthen India’s balance of payments position in the coming years.
These include recent trade agreements with major partners, the decision to allow 100 per cent foreign direct investment (FDI) in the insurance sector, the ethanol blending programme, measures supporting the energy transition, easing of FDI restrictions for land-bordering countries and further liberalisation of the External Commercial Borrowing (ECB) framework.
According to Malhotra, these measures are likely to improve capital inflows and strengthen India’s external sector resilience.
Current Account Risks Remain
Despite India’s strong external position, the RBI cautioned that rising energy prices and global trade uncertainties could put pressure on the current account balance in FY27.
Malhotra noted that India had successfully navigated elevated tariffs and trade-related uncertainties during FY26, but warned that geopolitical tensions and volatile commodity prices remain key risks.
He said the surge in energy prices and persistent uncertainty over global trade policies could widen India’s current account deficit during 2026-27.
However, he added that strong services exports and steady inward remittances are expected to provide support to the country’s external account.
RBI Assures Adequate Banking System Liquidity
The Governor also reiterated the central bank’s commitment to maintaining sufficient liquidity in the banking system.
Malhotra said the RBI will continue to ensure that liquidity conditions remain adequate to meet the productive requirements of the economy and support effective transmission of monetary policy decisions.
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Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalis…Read More
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