Forex Watch: India’s Forex Reserves See Mild Recovery After Sharp Drop

Mumbai: India’s foreign exchange reserves witnessed a sharp decline in the first week of 2026, but showed a modest recovery in the following week. During the week ending January 9, 2026, the country’s forex reserves increased slightly by $392 million, supported by a rise in gold reserves.

Current Reserve Levels

According to the Reserve Bank of India (RBI), India’s total foreign exchange reserves now stand at $687.193 billion, up marginally from the previous week’s decline of $9.809 billion. For context, the reserves had previously reached a record high of $704.885 billion during the week ending September 27, 2024.

Foreign Currency Assets (FCA) Decline

Within the total reserves, Foreign Currency Assets (FCAs)—a key component—fell by $1.124 billion in the week ending January 9, following a sharp $7.622 billion drop the previous week. FCAs include holdings in non-U.S. currencies such as the euro, pound, and yen, and are expressed in U.S. dollars. The FCA now stands at $550.866 billion.

Gold Reserves Rise

India’s gold reserves saw a positive trend, rising by $1.568 billion during the week, after a $2.058 billion decline in the preceding week. The total value of gold reserves now stands at $112.830 billion, with holdings exceeding 880 tons. Gold accounts for just over 14.7% of India’s total foreign exchange reserves.

SDR and IMF Reserves Slightly Down

India’s Special Drawing Rights (SDR) decreased slightly by $39 million, following a $25 million decline the previous week, bringing the total to $18.739 billion. Meanwhile, the country’s reserves held with the International Monetary Fund (IMF) fell by $108 million to $4.758 billion.

Summary

While India’s foreign exchange reserves are showing signs of stabilization after early-year volatility, the movements in FCAs, SDRs, and IMF reserves highlight the sensitivity of forex holdings to global currency fluctuations and market conditions. Gold reserves continue to provide a strong buffer, underpinning the country’s overall external financial stability.