India’s Forex Reserves Surpass $700 Billion Milestone for the First Time

 This marks a record increase of $12.58 billion, with foreign currency assets (FCAs) rising by $10.4 billion to $616 billion and gold reserves increasing by $2 billion to $65.7 billion. The surge is attributed to RBI’s dollar purchases and favorable valuation adjustments, driven by declining U.S. Treasury yields, a weakening dollar, and rising gold prices.

With this achievement, India joins China, Japan, and Switzerland as the only economies to have surpassed $700 billion in forex reserves. This growth has been bolstered by robust economic fundamentals, increased foreign inflows, and RBI’s proactive market interventions.

India’s reserves are projected to continue rising, potentially reaching $745 billion by March 2026, further strengthening RBI’s control over the rupee’s valuation in global markets.

So far in 2024, foreign inflows have hit $30 billion, bolstered by investments in local debt. This has positioned India’s reserves to cover over a year of projected imports, providing stability against external shocks. Analysts expect reserves to reach $745 billion by March 2026, enhancing the RBI’s ability to manage currency volatility. Since 2013, when India faced significant capital outflows, macroeconomic improvements and effective inflation control have led to a steady accumulation of forex reserves. The RBI’s proactive stance ensures a less volatile rupee, making Indian assets increasingly attractive to foreign investors.