India’s Forex Reserves Dip by $5.6 Billion Yet Stay Near Historic Highs Amid RBI Market Moves
India’s forex reserves fell by $5.6 billion to $689.7 billion, but remain near historic highs as the RBI intervenes to stabilize the rupee.
Key Points
- India’s forex reserves declined by $5.6 billion to $689.7 billion in the week ending October 31, 2025.
- The fall was driven by a $2 billion dip in foreign currency assets and a $3.8 billion reduction in gold reserves.
- Despite the decline, reserves remain close to the record high of $704.9 billion in September 2024.
- RBI’s interventions aim to curb rupee volatility amid global dollar strength and capital outflows.
- India still ranks as the world’s fourth-largest holder of foreign exchange reserves.
India’s Forex Reserves Reflect Temporary Decline, Structural Strength
TheInterviewTimes.com | November 9, 2025 — India’s Forex Reserves witnessed a notable decline of $5.6 billion during the week ending October 31, 2025, falling from $695.3 billion to $689.7 billion, according to data from the Reserve Bank of India (RBI). Despite the dip, the reserves continue to hover close to the all-time high of $704.9 billion reached in September 2024, reflecting the underlying resilience of India’s external sector.
The recent drop in India’s Forex Reserves marks the second consecutive weekly fall, largely due to declines in both foreign currency assets (FCA) and gold holdings. The FCA component, which forms the majority of total reserves, slipped by $2 billion to $564.6 billion, while gold reserves dropped by $3.8 billion to $101.7 billion, attributed to a correction in global gold prices amid economic and geopolitical uncertainties.
RBI’s Market Intervention to Stabilize the Rupee
The Indian rupee has weakened by around 3.3% against the US dollar so far in 2025, pressured by global dollar strength and persistent foreign capital outflows. In response, the RBI has actively intervened in the foreign exchange market to prevent sharp fluctuations and maintain orderly conditions.
RBI Governor Sanjay Malhotra clarified that the central bank’s interventions are not aimed at defending any specific rupee level but at ensuring stability. “Our forex reserves remain robust enough to cover more than 11 months of merchandise imports, which highlights the strength of India’s external buffers,” he noted.
The RBI’s dual approach—buying dollars during periods of rupee strength and selling them when the currency weakens—has allowed India’s Forex Reserves to remain steady despite volatile global conditions.
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Long-Term Growth in India’s Forex Reserves
On a broader scale, India’s Forex Reserves have demonstrated consistent expansion over recent years. Since January 2025, the reserves have grown by about $40 billion, following increases of $20 billion in 2024 and $58 billion in 2023. This sustained buildup has cemented India’s position as the world’s fourth-largest holder of foreign exchange reserves, behind China, Japan, and Switzerland.
Such robust reserves play a crucial role in protecting India from external shocks, ensuring smooth import payments, and building investor confidence amid uncertain global financial conditions.
Resilience Amid Global Economic Headwinds
Experts emphasize that India’s Forex Reserves act as a powerful macroeconomic stabilizer at a time when global interest rates, geopolitical risks, and commodity price swings are creating volatility. The reserves also enhance India’s credibility in international markets and provide policy flexibility to manage currency pressures effectively.
Despite short-term dips, the overall trajectory of India’s Forex Reserves underscores strong economic management and prudent foreign exchange policy by the RBI. The central bank’s strategy continues to balance market stability with currency flexibility, ensuring the Indian economy remains resilient against external vulnerabilities.
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Conclusion
While India’s Forex Reserves declined modestly by $5.6 billion in late October 2025, the overall reserve levels remain near historic highs. This reflects the strength of India’s external position, supported by RBI’s strategic interventions and steady economic fundamentals. As global uncertainties persist, India’s large forex buffer will remain a key pillar safeguarding its economic and financial stability.