India's forex reserves rebound, climbs $938 million to $682.32 billion
Mumbai, June 5
India's foreign exchange reserves rose by $938 million to $682.321 billion in the week ended May 28, reversing the decline recorded in the previous week, according to data released by the Reserve Bank of India on Friday.
The country's forex reserves had fallen by $7.511 billion to $681.384 billion in the preceding reporting week.
Despite the recent volatility, India's reserves remain among the highest globally, although they are below the record high of $728.494 billion reached in the week ended February 27.
The reserve stockpile came under pressure in recent months following the outbreak of conflict in the Middle East, which prompted the RBI to intervene in the foreign exchange market through dollar sales to support the rupee.
Prime Minister Narendra Modi has also appealed to citizens since May 11 to help conserve foreign exchange by reducing foreign travel, limiting fuel consumption and avoiding gold purchases for a year.
According to the RBI data, foreign currency assets (FCAs), which constitute the largest share of the country's reserves, increased by $3.116 billion to $546.148 billion during the reporting week.
FCAs, expressed in dollar terms, reflect the impact of fluctuations in major non-US currencies such as the euro, pound sterling and Japanese yen held in the reserves.
However, the value of India's gold reserves declined by $2.186 billion to $112.6 billion during the week.
The country's holdings of Special Drawing Rights (SDRs) with the International Monetary Fund remained unchanged at $18.747 billion.
Meanwhile, the RBI expressed optimism about foreign investment inflows into the country.
Speaking at the post-monetary policy press conference, RBI Deputy Governor Poonam Gupta said gross foreign direct investment (FDI) inflows are expected to exceed $100 billion in the current financial year 2026-27.
Gupta noted that gross FDI inflows had reached $95 billion in FY26, supported by healthy private capital formation and a rising investment-to-GDP ratio.
She said foreign investment could potentially rise to $110 billion or even $120 billion in FY27, describing the increase as a long-term structural trend rather than a one-year phenomenon.
"Private capital formation numbers actually have been very healthy. Investment-to-GDP ratio has been turning upwards," Gupta said, adding that India is likely to witness stronger FDI inflows in the coming years despite global economic uncertainties.
— IANS
Reader Comments
Finally some positive movement after last week's dip! The RBI's intervention makes sense—rupee stability is crucial for importers and common people. But I wish the government would address why our gold reserves dropped by $2 billion. That's a lot of yellow metal vanishing in one week!
As an investor tracking emerging markets, India's forex resilience is notable. But the PM appealing to citizens to cut foreign travel and gold buying seems like a short-term fix. Long-term, India needs to attract more FDI and reduce its current account deficit. The $100 billion FDI target sounds ambitious—let's see if it materializes.
Uncle Modi telling us to avoid gold purchases? 😅 Tell that to my mother during wedding season! But seriously, $728 billion record seems far now. With global uncertainty and Middle East tensions, RBI is doing a decent job managing reserves. Hope FDI inflows pick up as Deputy Governor suggested.
RBI's careful management is commendable, but the gold reserve drop is concerning. Is India selling gold to defend the rupee? That would be a risky strategy. Also, the FDI optimism seems overly rosy given global headwinds. Let's hope the $100 billion target isn't just election-year hype.
Finally some relief after weeks of decline. The RBI's decision to intervene is correct—a stable rupee is essential for controlling inflation and keeping our imports affordable. But I agree with others, the gold reserve decline needs proper explanation. Are we selling gold to buy dollars? That's not a sustainable practice.