India’s Forex Reserves Rise by $1.03 Billion to $687.26 Billion

According to the Reserve Bank of India (RBI), India’s foreign exchange reserves recorded a marginal weekly increase of $1.03 billion, reaching $687.26 billion as of December 5, 2025.
The rise was mainly driven by higher gold reserves, even as foreign currency assets — the largest component of the forex basket — saw a minor decline.

With this, India’s forex reserves remain close to the all-time high of $704.89 billion, recorded in September 2024, underscoring the country’s strong external position and effective reserve management by the RBI.

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India’s Forex Reserves Rise by $1.03 Billion to $687.26 Billion

Gold Reserves Drive Weekly Increase

Gold reserves increased by $1.033 billion, taking the total to $106.984 billion during the week.
The jump reflects a rise in global gold prices, driven by:

• Heightened geopolitical tensions, and
• Strong investment demand for gold as a safe-haven asset

The increase in gold holdings helped offset the decline in other components of the reserve basket.

Foreign Currency Assets See Marginal Dip

Foreign currency assets (FCAs) stood at $556.88 billion, registering a decline of about $151 million from the previous week.
Despite this dip, the overall reserve position remains robust.

The RBI noted that India’s foreign exchange reserves are adequate to cover more than 11 months of merchandise imports, providing a strong buffer against external shocks and currency volatility.

External Sector Strength and RBI’s Assessment

Following its latest Monetary Policy Committee (MPC) meeting, the RBI stated that:

• India’s external sector remains resilient amid global uncertainty.
• The reserves are sufficient to meet external financing requirements.
• The balance of payments position continues to show strength due to robust services exports, remittance inflows, and FDI stability.

This solid reserve position enhances investor confidence and supports the RBI’s strategy for rupee stability.

Trends in India’s Forex Reserves

• 2023: Reserves rose by about $58 billion
• 2024: Modest increase recorded
• 2025 (till December): Reserves expanded by nearly $47–48 billion

The RBI actively manages forex reserves to stabilise the rupee, using intervention strategies such as:

• Buying dollars when the rupee strengthens
• Selling dollars when the rupee weakens

Despite short-term fluctuations, the Indian rupee has depreciated by over 5% cumulatively in 2025, due to global interest rate movements and foreign capital outflows.

Exam-Oriented Key Facts

• India’s Forex Reserves (as of Dec 5, 2025): $687.26 billion
• Weekly Increase: $1.03 billion
• Gold Reserves: $106.984 billion (↑ by $1.033 billion)
• Foreign Currency Assets: $556.88 billion (↓ by $151 million)
• All-Time High Forex Reserves: $704.89 billion (September 2024)
• Import Cover: Over 11 months
• Main Driver of Increase: Rising global gold prices
• RBI Strategy: Manage reserves to maintain rupee stability
• Cumulative Rupee Depreciation (2025): ~5%
• Total Reserve Growth in 2025 (YTD): $47–48 billion

Question & Answer

Q1. What was India’s total foreign exchange reserves as of December 5, 2025?
(a) $682.50 billion
(b) $687.26 billion
(c) $694.00 billion
(d) $704.89 billion
Answer: $687.26 billion

Q2. What was the main factor behind the recent rise in India’s forex reserves?
(a) Increase in FDI inflows
(b) Higher gold reserves
(c) Growth in foreign currency assets
(d) Decline in imports
Answer: Higher gold reserves

Q3. What is the total value of India’s gold reserves as of the latest data?
(a) $105.22 billion
(b) $106.98 billion
(c) $108.45 billion
(d) $104.50 billion
Answer: $106.98 billion

Q4. How much did India’s gold reserves rise during the week ended December 5, 2025?
(a) $0.82 billion
(b) $1.03 billion
(c) $1.50 billion
(d) $2.00 billion
Answer: $1.03 billion

Q5. What is the current level of India’s foreign currency assets (FCA)?
(a) $556.88 billion
(b) $560.00 billion
(c) $550.25 billion
(d) $540.50 billion
Answer: $556.88 billion

Q6. When did India record its all-time highest forex reserves?
(a) June 2023
(b) September 2024
(c) March 2025
(d) December 2025
Answer: September 2024

Q7. India’s forex reserves can cover how many months of merchandise imports, according to RBI?
(a) 8 months
(b) 9 months
(c) 10 months
(d) 11 months
Answer: 11 months

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