Archive · 28 Aug 2026
India’s Forex Reserves Hit Record $729.3 Billion Amid Inflows
India keeps foreign currencies and gold as a financial safety cushion.
This cushion is called foreign exchange reserves.
India’s reserves reached a record $729.33 billion after rising for eight weeks in a row.
The country added about $63 billion during those eight weeks.
The Reserve Bank of India used special programs to encourage dollars to enter Indian banks.
Non-resident Indians provided most of the deposits attracted through these programs.
More reserves can help the RBI support the rupee during difficult periods.
However, the programs can be expensive because the RBI pays costs to attract and protect these deposits.
The pace of growth may slow after the special programs close.
India’s foreign exchange reserves rose $12.4 billion to a record $729.33 billion in the week ended August 21.
Reserves increased for eight consecutive weeks, gaining roughly $63 billion during that period.
RBI measures attracted nearly $73 billion between June 5 and August 21, including about $65 billion in NRI deposits.
Foreign currency assets rose $9.5 billion to $591.33 billion, while gold holdings increased $2.8 billion to $114.22 billion.
The larger reserve buffer gives the RBI more capacity to manage rupee volatility, though attracting deposits may cost about $5.7 billion annually.
- Who
- India, the Reserve Bank of India, banks, and non-resident depositors, particularly non-resident Indians.
- What
- India’s foreign exchange reserves rose to a record $729.33 billion after a $12.4 billion weekly increase.
- When
- The latest data covered the week ended August 21, following eight consecutive weeks of increases.
- Where
- India’s banking and foreign-exchange system.
- Why
- RBI incentives attracted overseas dollars, while foreign-currency assets, gold valuations, and central-bank accumulation also increased reserves.
Benefits of the reserve buildup
Costs and reasons for caution
RBI capacity
Benefits of the reserve buildup
The record reserve level gives the Reserve Bank of India greater room to smooth sharp rupee movements and cushion India against external financial shocks.
Costs and reasons for caution
The RBI’s intervention and accumulation strategy means the rise does not represent only new foreign capital or a naturally stronger rupee.
Effect of special deposit programs
Benefits of the reserve buildup
The programs attracted nearly $73 billion, substantially strengthening India’s external position and reducing pressure on its balance of payments.
Costs and reasons for caution
Some inflows may be temporary because banks and depositors could have brought funds forward before the facility closed.
Financial cost
Benefits of the reserve buildup
Attracting overseas deposits provided a rapid way to build reserves when global uncertainty and imported-fuel costs were creating pressure.
Costs and reasons for caution
The RBI bears banks’ hedging costs and invests the funds in relatively low-yielding assets; analysts estimated the annual carry cost at about $5.7 billion.
- Record reserves
- $729.33 billion
- Latest weekly increase
- $12.4 billion in the week ended August 21
- Eight-week increase
- Roughly $63 billion
- Scheme-related inflows
- Nearly $73 billion received between June 5 and August 21
- NRI deposits
- About $65 billion of the scheme-related inflows
- Foreign currency assets
- $591.33 billion after rising $9.5 billion
- Gold holdings
- $114.22 billion after increasing $2.8 billion
