India's Forex Reserves Hit Record High at $729 Billion

The Cliff News | 29 August 2026

India's foreign exchange reserves have reached a historic peak, soaring by $12.422 billion to an all-time high of $729.328 billion in the week concluding August 21. This significant surge, reported by the Reserve Bank of India (RBI) on Friday, underscores a robust upward trend in the nation's external financial buffer.

This marks the eighth consecutive week of growth for India's forex reserves, accumulating approximately $63 billion during this period. The current record surpasses the previous milestone set in February of this year.

Key Drivers of Reserve Growth

The substantial weekly increase was primarily fueled by the growth in foreign currency assets and the value of gold reserves. Foreign currency assets, which constitute the largest portion of the reserves, climbed by $9.482 billion to reach $591.333 billion.

The value of India's gold reserves also saw a notable increase, rising by $2.801 billion to $114.218 billion. Additionally, Special Drawing Rights (SDRs) saw an increment of $112 million, bringing their total to $18.852 billion. India's reserve position with the International Monetary Fund (IMF) also experienced a slight rise of $26 million, reaching $4.925 billion.

Changes in the value of foreign currency assets, when expressed in dollar terms, reflect fluctuations in non-US currencies such as the euro, pound, and yen held within the country's reserves.

Government Measures Boost Inflows

This record surge in forex reserves follows the implementation of a series of measures by the Indian government in June. These initiatives were designed to attract overseas dollar inflows and bolster the nation's balance of payments.

Key measures included offering discounted hedging facilities for overseas borrowings by public sector firms and banks. Furthermore, a free-of-cost hedging facility was introduced for banks to encourage overseas foreign currency deposits.

Data indicates that the RBI received nearly $73 billion under these schemes between June 5 and August 21. A significant portion of this, approximately $65 billion, came from non-resident Indian deposits.

The substantial inflow of funds prompted the central bank to expedite the closure of its deposit hedging facility by one month, setting a new closing date for the end of August.