Forex reserves hit 7-month high of $690.6 billion, gold up $4.5 billion

India's forex reserves rise by $4.5 billion to a seven-month high of $690.6 billion, driven largely by gold valuation gains amid continued rupee volatility

India’s foreign exchange reserves (forex) rose by $4.5 billion to $690.6 billion in the week ended May 9, on the back of rising gold reserves, data released by the Reserve Bank of India (RBI) showed.

 

Gold reserves increased by $4.5 billion, while foreign current assets, the largest component of the forex kitty, increased by only $196 million.

 

The total forex reserves were highest since October 4, 2024, when it hit $701 billion. The reserves had hit a record high of $705 billion in September 2024. In 2025 so far, foreign exchange reserves swelled by $56 billion.

 

According to the experts, total reserves rose on the back of revaluation. Gold prices increased by 2.61 per cent to $3,325 per ounce during the week.

 

“This was purely revaluation gains because the RBI net sold dollars in the spot albeit a small amount,” said Gaura Sen Gupta, chief economist, IDFC FIRST Bank. 

 

Foreign exchange market participants said that the central bank heavily sold US dollars during the week to counter volatility in the exchange rate due to geopolitical tensions.

 

“The RBI was there to protect 86 per dollar mark during the war-like situation last week,” said a dealer at a state-owned bank. “We were moving almost 50 paisa per day, they (RBI) had to intervene,” he added.

 

The rupee depreciated by 0.98 per cent in the reporting week. On May 8, the domestic currency experienced its steepest single-day decline in over two years, erasing all gains for both calendar and financial years. However, the central bank’s intervention through dollar sales helped stabilise the currency, leading to a recovery on Friday. By the end of the week, the rupee had appreciated by 0.27 per cent for the CY and 0.1 per cent for the FY.