India’s Forex Reserves Rise $3.5 Billion as Gold Holdings Strengthen: RBI Data

India’s forex reserves rebounded in the week ended August 29 after a sharp fall in the preceding week. The RBI reported that reserves rose by $3.51 billion, reversing a prior decline of $4.386 billion that had brought reserves down to $690.72 billion. The rise was largely supported by higher gold reserves and gains in foreign currency assets, alongside an improvement in India’s reserve position with the International Monetary Fund (IMF).

Breakdown of the Reserve Growth

• Foreign Currency Assets (FCA): Increased by $1.686 billion, reaching $583.94 billion. FCA movements also reflect valuation changes in non-US currencies such as the euro, pound, and yen.
• Gold Reserves: Rose significantly by $1.766 billion, climbing to $86.77 billion.
• Special Drawing Rights (SDRs): Added $40 million, totalling $18.78 billion.
• IMF Reserve Position: Improved by $18 million to $4.75 billion.

RBI’s Preference for Gold Over US T-Bills

The RBI’s strategy shows a gradual shift toward strengthening gold reserves while reducing exposure to US Treasury bills. Recent data from both the RBI and the US Department of Treasury highlights this rebalancing move:

• As of June 27, 2025, India’s gold reserves stood at 879.98 metric tonnes, up from 840.76 tonnes a year earlier.
• Meanwhile, investments in US T-bills dropped to $227 billion in June 2025, compared with $242 billion in June 2024.
• Despite this decline, India still ranks among the top 20 global investors in US T-bills, ahead of countries such as Saudi Arabia and Germany.

Why the Focus on Gold?

Gold is increasingly seen by central banks worldwide as a safer hedge against global uncertainties, inflationary risks, and geopolitical pressures. By boosting its gold holdings, the RBI is not only diversifying its reserve portfolio but also insulating India’s reserves from fluctuations tied to US fiscal and monetary policies.

Read More: Best Gold ETFs in September 2025 Based on Expense Ratio.

Conclusion

India’s rising forex reserves, driven by a surge in gold holdings and steady inflows, underscore the RBI’s strategic focus on diversification. While the country continues to hold a significant amount of US T-bills, the growing preference for gold signals a broader shift toward resilience in reserve management.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.