India’s Forex Reserves Rise by $1.03 Billion as Gold Holdings Strengthen

After witnessing a continuous decline for two consecutive weeks, India’s foreign exchange reserves have registered a turnaround, rising by $1.03 billion in the week ended December 5, 2025. The recovery has been primarily driven by a sharp increase in the country’s gold reserves, according to data released by the Reserve Bank of India (RBI) on Friday.

Despite a marginal fall in foreign currency assets (FCA), the surge in the value of gold holdings helped push the overall forex reserves higher. With this increase, India’s total foreign exchange reserves now stand at $687.26 billion. This comes after a decline of $1.877 billion in the previous week and a sharper fall of $4.472 billion a week before that. Notably, India’s forex reserves had touched a record high of $704.885 billion in the week ended September 27, 2024.

Foreign Currency Assets Decline

The RBI data show that during the week under review, India’s foreign currency assets—the largest component of the forex reserves—fell by $151 million to $556.88 billion. In the preceding week, FCA had seen a steep decline of $3.569 billion. Foreign currency assets, which are expressed in dollar terms, also reflect the impact of movements in non-US currencies such as the euro, pound, and yen.

Gold Reserves Provide Support

Gold reserves emerged as the key contributor to the rise in overall forex reserves. During the week ended December 5, the value of India’s gold reserves increased by $1.188 billion, following a $1.613 billion rise in the previous week. With this, the total value of the country’s gold reserves has climbed to $106.984 billion.

At present, the Reserve Bank of India holds more than 880 tonnes of gold. Gold now accounts for over 14.7% of India’s total foreign exchange reserves, highlighting its growing importance as a stabilising asset amid global economic uncertainties.

SDR Rises, IMF Reserve Falls

The data further reveal a modest increase in India’s Special Drawing Rights (SDR) with the International Monetary Fund. SDR holdings rose by $93 million during the week to reach $18.721 billion. However, India’s reserve position with the IMF declined by $97 million, bringing it down to $4.675 billion.

Overall, while foreign currency assets continue to face pressure, the steady accumulation and valuation gains in gold reserves have helped cushion India’s forex position, providing a crucial buffer in an uncertain global financial environment.