Mumbai- India’s foreign exchange reserves rose by $4.885 billion to reach a new all-time high of $728.494 billion in the week ending February 27, according to data released by the Reserve Bank of India on Friday.
The previous record for the country’s forex reserves stood at $725.727 billion, recorded in mid-February.
Foreign currency assets, which form the largest component of the reserves, were valued at $573.125 billion during the week. These assets, expressed in US dollar terms, also reflect the impact of fluctuations in other currencies such as the euro, pound and yen held in the reserves.
The gold reserves component also saw a sharp rise, increasing by over $4.141 billion to reach $131.63 billion for the week ended February 27.
Central banks around the world have been increasing their gold holdings as a safe-haven asset amid global geopolitical uncertainties. The share of gold in India’s foreign exchange reserves maintained by the RBI has nearly doubled since 2021.
According to a report by Morgan Stanley, the RBI has added around 75 tonnes of gold to its reserves since 2024, taking its total holdings to 880 tonnes. Gold now accounts for roughly 14 per cent of India’s total forex reserves.
Meanwhile, the Special Drawing Rights (SDR) component of the reserves stood at $18.866 billion, reflecting an increase of $26 million compared to the previous week.
A rise in forex reserves gives the RBI greater flexibility to stabilise the rupee against the US dollar. Adequate reserves allow the central bank to intervene in both spot and forward currency markets by supplying dollars when needed, thereby preventing excessive volatility in the rupee.
Separately, India’s current account deficit (CAD) stood at $13.2 billion, or 1.3 per cent of GDP, in the third quarter (October–December) of the financial year 2025-26, according to preliminary balance of payments data released earlier by the RBI.
In the same quarter of the previous financial year, the deficit was $11.3 billion, or 1.1 per cent of GDP.
The merchandise trade deficit widened to $93.6 billion in Q3FY26 from $79.3 billion a year earlier. However, this was partly offset by strong growth in services exports and remittances from Indians working abroad.
Net services receipts increased to $57.5 billion in Q3FY26 from $51.2 billion in Q3FY25. The RBI noted that services exports recorded year-on-year growth in major sectors such as computer services and other business services.
Remittances sent home by overseas Indians also increased, rising to $36.9 billion during the quarter compared to $35.1 billion in the same period last year.
With inputs from IANS