India’s foreign exchange reserves dipped by $2.119 billion in the week that ended February 20 to $723.608 billion, after having reached a new all-time high recently, according to the Reserve Bank of India’s latest data.
Foreign exchange reserves dipped in the latest week, driven by a drop in gold reserves and foreign currency assets. Over the past few weeks, the forex kitty has been largely in an uptrend. Foreign exchange reserves touch record high of $725.727 billion in February.
For the reported week (that ended February 20), India’s foreign currency assets (FCA), the largest component of foreign exchange reserves, stood at $572.564 billion, down $1.039 billion. The RBI data showed that gold reserves currently stood at $127.489 billion, down $977 million from the previous week.
After the latest monetary policy review meeting last month, the RBI had said that the country’s foreign exchange reserves were sufficient to cover more than 11 months of merchandise imports. RBI said India’s external sector remains resilient, and it was confident of comfortably meeting the country’s external financing requirements.
According to data, the forex kitty has increased by about $56 billion in 2025. In 2024, reserves rose by just over $20 billion. In 2023, India added around $58 billion to its foreign exchange reserves, in contrast to a cumulative decline of $71 billion in 2022. Foreign exchange reserves, or forex 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.
The RBI often intervenes by managing liquidity, including selling dollars, to prevent a steep depreciation of the rupee. The RBI strategically buys dollars when the Rupee is strong and ideally sells when it weakens.