India’s foreign exchange reserves have jumped by $12.588 billion, reaching a new record of $704.885 billion for the week ending September 27, according to the Reserve Bank of India.
The week before, the reserves had increased by $2.838 billion, bringing the total to $692.296 billion. This latest rise is one of the biggest weekly increases ever and is the first time India’s reserves have surpassed $700 billion.
For the same week, foreign currency assets, a big part of the total reserves, went up by $10.468 billion to $616.154 billion. The value of these assets can change based on the exchange rates of currencies like the euro, pound, and yen against the US dollar.
India’s reserves first went over $100 billion in December 2003. It took more than three years to add the next $100 billion. The jump from $200 billion to $300 billion happened in less than a year, reaching $300 billion by February 29, 2008. But it took more than nine years to go from $300 billion to $400 billion. With this achievement, India is now the fourth country in the world to have more than $700 billion in foreign reserves, along with China, Japan, and Switzerland.
Analysts at BofA Securities expect India’s reserves to reach $745 billion by March 2026, as the country is likely to have a healthy balance of payments surplus of around $40-50 billion each year. The central bank appears comfortable holding larger foreign reserves because it wants to prepare for potential external risks, BofA Securities said in a note to investors on Friday.
Gold reserves also grew, rising by $2.184 billion to $65.796 billion. Additionally, Special Drawing Rights (SDRs), which are international reserve assets, increased by $8 million to $18.547 billion. However, India’s reserve position with the International Monetary Fund (IMF) dropped by $71 million to $4.387 billion.
In banking news, the growth rate for bank loans remained steady at 13.0%, the same as before, and deposit growth also stayed at 11.5%, unchanged from the previous week.
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