India's forex reserves rise by $4.5 billion to hit $702 billion

India’s foreign exchange reserves rose by $4.5 billion to $702.3 billion for the week ended October 17, mainly driven by a surge in gold reserves, according to data released by the Reserve Bank of India (RBI) on Friday. Gold reserves held by the RBI as part of the country’s foreign exchange reserves surged by $6.2 billion to exceed $108.5 billion for the first time, supported by a sharp rise in global gold prices and increased purchases by the central bank.

Foreign currency assets, which form the largest component of the reserves, declined by $1.7 billion to $570.4 billion during the week, influenced by fluctuations in currencies such as the euro, pound, and yen. India’s reserve position with the International Monetary Fund (IMF) fell by $30 million to $4.62 billion during the same period.

Over the past decade, the share of gold in India’s foreign exchange reserves has nearly doubled, rising from below 7 per cent to almost 15 per cent. Analysts note that this is the highest proportion of gold in the country’s total reserves since 1996-97, reflecting steady accumulation by the RBI and the surge in global bullion prices. Gold prices have risen by about 65 per cent in 2025, driven by strong demand as a safe-haven asset amid geopolitical tensions in the Middle East and trade uncertainties linked to U.S. tariff hikes. Central banks worldwide have similarly increased their gold holdings in response to global economic uncertainty.

Since 2024, the RBI has added approximately 75 tonnes to its gold reserves, bringing total holdings to 880 tonnes, which now constitute around 14 per cent of India’s total foreign exchange reserves, according to a Morgan Stanley report.