India's Foreign Exchange Reserves Reach $665.4 Billion High
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Synopsis
India's foreign exchange reserves have surged to $665.4 billion, marking a five-month high. This increase of $6.6 billion reflects strong economic fundamentals and enhances the rupee's position against the US dollar. The RBI's latest data shows a positive trend in forex reserves amid improved merchandise trade performance.
Key Takeaways
- Forex reserves hit $665.4 billion.
- Gold reserves rose to $77.8 billion.
- Fourth week of consecutive growth.
- Merchandise trade deficit narrows to $14.05 billion.
- Exports increased by 1.3% in February.
Mumbai, April 4 (NationPress) India’s foreign exchange reserves have jumped by $6.6 billion, reaching a five-month peak of $665.4 billion for the week ending March 28, 2025, as revealed by data from the Reserve Bank of India on Friday.
The RBI’s Weekly Statistical Supplement indicates that the nation’s gold reserves, which are also included in the forex reserves, rose by $519 million to $77.8 billion.
This marks the fourth consecutive week of growth in the forex reserves, following an increase of $4.5 billion to $658.8 billion in the previous week ending March 21. The earlier downward trend caused by revaluation and forex market interventions by the RBI to minimize rupee volatility has now shifted positively over the last four weeks.
Previously, the country’s forex reserves had reached a record high of $704.885 billion in September 2024.
A strengthening forex kitty also supports the rupee against the US dollar, which benefits the economy. With the recent uptick in foreign exchange reserves, the rupee has shown improvement.
Growth in foreign exchange reserves is indicative of the economy’s robust fundamentals and provides the RBI with greater flexibility to stabilize the rupee during periods of volatility.
A substantial forex reserve allows the central bank to intervene in both the spot and forward currency markets by supplying additional dollars to prevent a drastic depreciation of the rupee.
On the other hand, a shrinking forex reserve limits the RBI’s capacity to support the rupee.
In the meantime, India’s merchandise trade deficit has decreased to its lowest level in over three years, standing at $14.05 billion in February, down from $22.99 billion in January, as exports remained stable while imports fell, according to the latest data from the Ministry of Commerce and Industry. This signals a strengthening external sector despite ongoing geopolitical tensions affecting global economic stability.
The nation’s merchandise exports rose by 1.3 percent to $36.91 billion in February, compared to $36.43 billion in January, while imports dropped by 16.3 percent to $50.96 billion, down from $59.42 billion the previous month.
