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India's foreign exchange reserves (Forex) are sufficient to meet 11 months of the country's imports and about 96 per cent of external debt, said Governor Sanjay Malhotra while announcing the outcome of the Monetary Policy Committee (MPC) decisions on Friday.
The RBI governor expressed confidence, stating that India's external sector is resilient and key external sector vulnerability indicators are improving. "As of May 30, 2025, India's foreign exchange reserves stood at USD 691.5 billion. These are sufficient to fund more than 11 months of goods imports, and about 96 per cent of external debt outstanding," said Governor Sanjay Malhotra. On the other hand, External commercial borrowings (ECBs) and non-resident deposits have seen higher net inflows compared to the previous year. RBI governor added "Overall, India's external sector remains resilient as key external sector vulnerability indicators continue to improve. We remain confident of meeting our external financing requirements." The latest RBI data showed that India's foreign currency assets (FCA), the largest component of foreign exchange reserves, stood at USD 586.167 billion. The gold reserves currently amount to USD 83.582 billion, according to RBI data. The RBI releases forex data on every Friday. As per the data released by the Central Bank, India's forex kitty is quite close to its all-time high of USD 704.89 billion, reached in September 2024. In 2023, India added around USD 58 billion to its foreign exchange reserves, contrasting with a cumulative decline of USD 71 billion in 2022. In 2024, the reserves rose by a little over USD 20 billion. Central banks worldwide are increasingly accumulating safe-haven gold in their foreign exchange reserves kitty, and India is no exception. The share of gold maintained by the Reserve Bank of India (RBI) in its foreign exchange reserves has almost doubled since 2021. Foreign exchange reserves, or FX reserves, are assets held by a nation's central bank or monetary authority, primarily in reserve currencies such as the US Dollar, with smaller portions in the Euro, Japanese Yen, and Pound Sterling. The RBI often intervenes by managing liquidity, including selling dollars, to prevent steep Rupee depreciation. The RBI strategically buys dollars when the Rupee is strong and sells when it weakens. (ANI)
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