India’s Forex Reserves Hit Record $729.3 Billion

India’s foreign exchange reserves surged to an unprecedented $729.3 billion in the week ending August 21. This marks a significant increase of $12.4 billion, establishing a new all-time record for the nation.

This remarkable growth is primarily attributed to a strategic scheme implemented by the Reserve Bank of India (RBI). The central bank initiated a program designed to attract non-resident deposits by taking on foreign currency risks from commercial banks.

Key Reserve Components

• Foreign currency assets, the largest component, grew by $9.5 billion to reach $591.3 billion.
• Gold reserves also saw a notable rise of $2.8 billion, climbing to $114.2 billion.

The new peak of $729.3 billion surpasses the previous record of $728.5 billion, which was set earlier on February 27, 2026. This prior high was recorded before a temporary decline influenced by the US-Iran war.

RBI’s Strategic Interventions

The Reserve Bank of India’s proactive measures have been crucial in drawing in dollar inflows and stabilizing the Indian rupee. These interventions included a concessional USD-INR forex swap facility launched in June.

This facility specifically targeted FCNR(B) deposits, overseas foreign currency borrowings, and External Commercial Borrowings (ECBs). The primary aim was to make these avenues more attractive for foreign capital.

• The forex swap facility alone is estimated to have mobilized between $65 billion and $73 billion.
• It successfully concluded its operations on August 31.

These consistent efforts by the RBI underscore its commitment to bolstering India’s external sector stability. The accumulation of robust foreign exchange reserves provides a crucial buffer against global economic volatility.