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India’s foreign exchange reserves increased by $4.5 billion to $702.28 billion in the week ending October 17, according to the Reserve Bank of India’s Weekly Statistical Supplement. Officials attributed the rise largely to a higher valuation of gold holdings, which have grown in value amid a global surge in demand for the metal. The latest level puts India’s reserves just below their all-time high of $704.89 billion reached last year in September.

The central bank’s data showed that gold reserves climbed by $6.18 billion during the week to $108.55 billion. The jump comes at a time when international gold prices have been on a steady rise, supported by investor preference for safer assets as global uncertainties persist.

On the other hand, foreign currency assets - the largest component of total reserves - fell by $1.69 billion to $570.41 billion. These assets include holdings in major global currencies such as the dollar, euro, pound and yen.

After the recent monetary policy review, RBI Governor Sanjay Malhotra said India’s foreign exchange reserves were strong enough to cover more than 11 months of merchandise imports. He added that the country’s external position remains stable and that the RBI is confident of meeting all external payment commitments without difficulty.

India’s reserves have been rising steadily this year, up by about $53 billion so far in 2025. This follows a smaller gain of just over $20 billion in 2024 and a strong recovery in 2023, when the country added around $58 billion after a sharp fall in 2022.

These include foreign currencies, gold and other assets that can be used to settle external obligations or cushion against sudden capital outflows.

The steady rise in reserves signals improved confidence in India’s economic fundamentals. Economists say the higher reserves give the country greater room to manage external pressures, including oil price volatility or global capital movements.

With the forex stockpile now close to a record high, India’s external balance appears comfortably placed, supported by strong exports, healthy remittance inflows and prudent management by the RBI.

Ankit Kumar is a Senior Sub Editor at Zee Business. He covers international affairs, politics, climate change, business, finance and global elections. With experience acros