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India's Forex Reserves Hit Record $728.49 Billion, Gold Holdings Surge

India's foreign exchange reserves climbed to a new all-time high of $728.494 billion in late February, driven by significant increases in foreign currency assets and gold holdings. The Reserve Bank of India has substantially boosted its gold reserves, adding about 75 tonnes since 2024, with gold now constituting around 14% of total reserves. Meanwhile, the country's current account deficit widened to $13.2 billion, or 1.3% of GDP, in the third quarter of FY26, primarily due to a larger merchandise trade deficit. This was partially offset by robust growth in services exports and strong remittances from Indians working overseas.

Key Points: India's Forex Reserves Reach All-Time High of $728.49 Billion

  • Reserves hit $728.49B record
  • Gold reserves surge to $131.63B
  • Current account deficit at 1.3% of GDP
  • Services exports and remittances rise strongly
3 min read

India's forex reserves surge to all-time high of $728.49 billion

India's forex reserves surge to a record $728.49 billion as RBI boosts gold holdings. Current account deficit data also released.

"The RBI has added approximately 75 tonnes to its gold reserves since 2024 - Morgan Stanley report"

Mumbai, March 6

India's foreign exchange reserves surged by $4.885 billion to an all-time high of $728.494 billion in the week ended February 27, data released by the Reserve Bank of India showed on Friday.

The previous all-time high for the country's foreign exchange kitty was $725.727 billion, which was seen in mid-February.

Foreign currency assets, a major component of the reserves, stood at $573.125 billion during the week. Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound, and yen held in the foreign exchange reserves.

The gold component of the foreign exchange reserves increased by over $4.141 billion to $131.63 billion for the week ended Feb 27.

Central banks worldwide have accumulated substantial amounts of gold as a safe-haven asset in their foreign exchange reserves amid uncertainty created by geopolitical tensions. The share of gold maintained by the Reserve Bank of India (RBI) as part of its foreign exchange reserves has almost doubled since 2021.

The RBI has added approximately 75 tonnes to its gold reserves since 2024, bringing its total holdings to 880 tonnes, which now constitute about 14 per cent of India's total foreign exchange reserves, according to a Morgan Stanley report.

The special drawing rights component in the forex kitty stood at $18.866 billion, which is a $26 million increase over the previous week.

An increase in the country's foreign exchange kitty gives the RBI more headroom to strengthen the rupee vis-a-vis the US dollar. Adequate forex reserves enable the RBI to intervene in the spot and forward currency markets by releasing more dollars to prevent the rupee from going into a free fall and curbing its volatility.

Meanwhile, India's current account deficit (CAD) stood at $13.2 billion, or 1.3 per cent of GDP, in the third quarter (October-December) of the financial year 2025-26, according to the RBI's preliminary data on the balance of payments released earlier this week.

The deficit stood at $11.3 billion, or 1.1 per cent of GDP, in the corresponding quarter of the previous financial year.

The merchandise trade deficit increased to $93.6 billion in Q3FY26 from $79.3 billion a year earlier. However, there was a robust increase in services exports and remittances sent back home by Indians working overseas during the quarter.

Net services receipts rose to $57.5 billion in Q3FY26 from $51.2 billion in Q3FY25. The RBI stated that services exports increased on a year-on-year basis in major categories such as computer services and other business services.

Remittances by Indians employed overseas shot up to $36.9 billion from $35.1 billion a year earlier.

- IANS

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Reader Comments

S
Shreya B
Great to see the reserves growing, but the article also mentions the current account deficit is widening. The trade deficit is nearly $94 billion! While services exports and remittances are saving grace, we need to focus on boosting manufacturing exports. The headline number is good, but the underlying details need attention.
A
Arjun K
The real heroes here are our IT professionals and the diaspora sending money home. $36.9 billion in remittances and strong services exports are literally funding our import bill and building this reserve. Jai ho to all the hardworking Indians abroad!
P
Priya S
Doubling the gold reserves since 2021 shows the RBI is learning from global uncertainty. In our culture, we've always trusted gold as a safe asset. Good to see the country thinking the same way. This makes our financial position much more resilient.
D
David E
As someone working in finance, this is a very positive indicator for foreign investors. It signals macroeconomic stability and reduces the risk of a currency crisis. The RBI now has ample firepower to manage external shocks. Well managed.
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Meera T
All this is good on paper, but when will the common person feel the benefit? A strong rupee should make imports like oil cheaper, but petrol prices are still high. I hope this economic strength translates into better control over inflation and lower prices for essentials.

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