India Forex Reserves Rise to Record

India’s foreign exchange reserves fell for a fourth consecutive week to $734.6 billion as of October 2, 2026, according to a footnote to Reserve Bank of India Governor Sanjay Malhotra’s monetary policy statement. Reserves have declined from their recent peak of $785.71 billion on September 4, a drop of around $50 billion in less than a month. The drawdown reflects RBI intervention in the foreign-exchange market, including dollar sales to smooth the rupee’s decline and sell/buy FX swaps aimed at absorbing surplus liquidity. Despite the central bank’s support, including its first rate hike since 2023 in October, the rupee has continued to weaken, pressured by elevated oil prices, rising US Treasury yields and increased foreign equity outflows.

Foreign exchange reserves held at the Reserve Bank of India rose to a record high of $729.33 billion equivalent as of July 21st, 2026, following a large magnitude of dollar inflows to the Indian financial system. The RBI introduced special deposit programs for domestic banks by overseas Indian citizens in its latest effort to tame the rupee's decline. The measures garnered $74 billion of inflows since the introduction of the facilities. Foreign exchange reserves had plunged since March as the war in the Middle East lifted oil prices and pressured the rupee, driving the RBI to sell hard currency to defend local exchange rates.