MUMBAI (Diya TV) — India becomes the fourth country in the world to achieve the milestone of over $700 billion in foreign exchange reserves. According to a report of the Reserve Bank of India dated September 27, 2024, a total of about $704.89 billion constitute the overall reserves, a crucial benchmark for the economy of the country.
Growth in India’s foreign exchange reserves comes from a variety of factors, most importantly sustained foreign investments into the country’s stock and bond markets. India’s forex reserves increased for the week ended September 27 by $12.6 billion, the biggest weekly increase since mid-July 2023. Growth comprised a $10.4 billion increase in foreign currency assets, which added to $616 billion, as well as a $2 billion increase in its gold reserves, now at $65.7 billion.
RBI Governor Shaktikanta Das reminded that maintaining a foreign exchange buffer is critical in times of uncertainty for the world economy. It particularly mentioned that these reserves would be imperative for balancing the stability of the Indian rupee against the US dollar, all the more during the periods of volatility.
Significant growth, according to financial analysts, reflects the strength of the India balance-of-payments position and a dwindling current account deficit. This helps increase the resilience of the Indian economy in terms of recovering from potential external financial shocks by tapping into these reserves. Bank of America analysts think that the forex reserves of India could swell to about $745 billion as of March 2026, which may imply that positive developments are visible regarding inflows of foreign investments and overall stability in the country’s economy.