Mumbai, Oct 24 (NationPress) India’s foreign exchange reserves have experienced a remarkable increase of $4.5 billion, reaching $702.3 billion for the week ending October 17. This growth is primarily attributed to the rise in the value of gold reserves, as revealed by the data from the Reserve Bank of India (RBI) on Friday.

The gold reserves held by the RBI as part of the nation’s foreign exchange assets surged by $6.2 billion, surpassing the $108.5 billion mark for the first time, driven by a significant increase in gold prices and enhanced purchases by the central bank.

Meanwhile, foreign currency assets, which represent the largest segment of the reserves, decreased by $1.7 billion to $570.4 billion during the same week. These assets are subject to fluctuations in the value of international currencies like the euro, pound, and yen.

Additionally, India’s reserve position with the International Monetary Fund (IMF) fell by $30 million, settling at $4.62 billion during the week, as per RBI data.

The proportion of gold in India’s foreign exchange reserves has nearly doubled in the last decade, increasing from below 7 percent to almost 15 percent. This reflects consistent accumulation by the central bank and rising global bullion prices. This is the most significant share of gold in the total reserves since 1996-97, according to market analysts.

Gold prices have soared by up to 65 percent in 2025, largely due to heightened demand for the precious metal as a safe-haven asset amidst escalating geopolitical uncertainties in the Middle East and trade tensions resulting from US tariff increases.

Globally, central banks have amassed considerable amounts of gold to bolster their foreign exchange reserves amid rising geopolitical tensions. The share of gold held by the Reserve Bank of India has almost doubled since 2021.

The RBI has added around 75 tonnes to its gold reserves since 2024, bringing its total to 880 tonnes, which now constitutes approximately 14 percent of India’s total foreign exchange reserves, as reported by Morgan Stanley.

As the world's second-largest consumer of gold, trailing only China, India relies heavily on imports to satisfy its demand. The tradition of purchasing gold is deeply ingrained in Indian culture, often used in large quantities for jewellery gifts during wedding ceremonies. It also serves as an essential investment channel and a status symbol for families and individuals.