India’s foreign exchange reserves fell by $2.334 billion to $700.236 billion for the week ending September 26, 2025, according to data released by the Reserve Bank of India (RBI) on October 3.
This follows a previous week’s decline of $396 million, bringing the total reserves down from $702.57 billion.
The decrease was primarily due to a significant drop in foreign currency assets, which decreased by $4.393 billion to $581.757 billion.
These assets, expressed in dollar terms, include the effect of appreciation or depreciation of non-U.S. currencies such as the euro, pound, and yen held in the foreign exchange reserves.
The decline in foreign currency assets is attributed to the depreciation of these currencies against the U.S. dollar, impacting the overall value of India’s reserves.
In contrast, India’s gold reserves increased by $2.238 billion to $95.017 billion during the same period. This rise in gold holdings reflects a strategic move by the RBI to diversify its reserve assets amid global economic uncertainties.
Gold is considered a safe-haven asset, and its inclusion in the reserves provides a hedge against currency fluctuations and geopolitical risks.
Additionally, Special Drawing Rights (SDRs) declined by $90 million to $18.789 billion, and India’s reserve position with the International Monetary Fund (IMF) decreased by $89 million to $4.673 billion.
These reductions are part of the overall decline in the reserve components, indicating a tightening of liquidity in the international financial system.
Despite the recent declines, India’s foreign exchange reserves remain substantial.
As of September 26, the reserves are sufficient to cover approximately 11 months of merchandise imports and can cover about 95.4% of India’s outstanding external debt as of the end of March 2025. This indicates strong external sector resilience and a healthy buffer against global financial uncertainties.
The recent depreciation of the Indian rupee, trading near its all-time low, has been influenced by regional weakness across Asian currencies and ongoing trade tensions with the United States.
The rupee opened at around 88.74-88.78 per dollar on September 30, close to last week’s record low. These pressures have led to significant equity outflows, with foreign investors pulling out $1.8 billion last week, over $300 million of which occurred on Monday alone.
The RBI has been actively intervening in the currency markets to curb the rupee’s decline and maintain market stability.
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