India’s economic arsenal just got mightier, with foreign exchange reserves vaulting to an all-time high of $709.413 billion in the week to January 23, gaining $8.053 billion. RBI data dropped Friday spotlights this feat, timed perfectly before the February 1 budget reveal.
Topping the September 2024 record of $704.89 billion, key drivers included a $2.367 billion rise in FCAs to $562.885 billion and a stellar $5.635 billion surge in gold to $123.088 billion.
SDRs ticked up $33 million to $18.737 billion, and IMF reserves added $18 million to $4.703 billion. This caps a fortnight of gains, after last week’s $14.167 billion boost to $701.36 billion.
In essence, forex reserves are India’s shield against global storms—stabilizing the rupee, funding trade deficits, and attracting investor trust. High levels denote healthy dollar earnings from merchandise, services, and capital accounts.
Economists hail this as a pre-budget morale booster, enabling bold reforms and spending without reserve depletion fears. It underscores policy successes in inflation control, growth revival, and external sector management.
Looking ahead, sustained reserve accretion could fortify India’s stance in multilateral forums, aid climate finance access, and support rupee internationalization ambitions. A resilient economy awaits policy levers to unlock further potential.