Record $44.9bn jump takes India’s forex reserves to lifetime high of $785.71bn
India's forex reserves had been under pressure since the West Asia conflict began earlier this year. The rupee came under sustained pressure during the period, prompting the RBI to intervene in the foreign exchange market through dollar sales.
India's foreign exchange reserves surged by a record $44.903 billion in the week ending September 4, reaching a lifetime high of $785.706 billion, according to the Reserve Bank of India (RBI). This marked a significant jump following an increase of $11.475 billion in the previous reporting week, which had pushed the reserves to $740.803 billion.
The surge came amid the ongoing US-Iran conflict, which initially put pressure on India's forex reserves and the rupee. However, the Reserve Bank of India intervened by selling dollars and announcing concessional forex swap initiatives in June, resulting in more than $136 billion in fresh inflows. The largest component of India's forex reserves, foreign currency assets, rose by $47.498 billion during the week to $648.168 billion.
The value of gold reserves declined by $2.594 billion during the same period. Despite the strong forex reserves, India continues to face external pressures, including the ongoing war and high energy import costs, prompting Prime Minister Narendra Modi to urge citizens to conserve foreign exchange.
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