Forex Update: India’s Gold Reserves Rise to $84.5 Billion as of July 4 Despite Overall Dip

India’s foreign exchange (forex) reserves dropped by $3.04 billion, standing at $699.74 billion as of July 4, 2025, as per the latest data released by the Reserve Bank of India (RBI). This marks a reversal from the previous week, when reserves had increased by $4.8 billion. Notably, while the overall forex reserves declined, gold reserves showed a positive uptick, underscoring their role as a safe-haven asset in volatile market conditions.

Dip in FCA, Rise in Gold and SDRs

The largest component of the reserves, foreign currency assets (FCA), fell by $3.53 billion, bringing the total to $591.29 billion. These assets are impacted by changes in global currency values, such as the euro, yen, and pound, and are expressed in US dollar terms.

In contrast, gold reserves rose by $342 million to reach $84.5 billion, signalling continued accumulation or revaluation by the RBI. The central bank also reported a rise in Special Drawing Rights (SDR) by $39 million, taking the total SDR holdings to $18.86 billion. However, India’s reserve position with the International Monetary Fund (IMF) saw a decline of $107 million, standing at $4.73 billion for the week.

Currency Market Moves Prompt Strategic Actions

These changes reflect the RBI’s active forex management strategy, where it intervenes to curb excess volatility in the rupee without targeting any specific exchange rate level. Such interventions can include buying or selling foreign currencies, depending on global and domestic market conditions.

Despite the dip in total reserves, the rise in gold holdings demonstrates the RBI’s effort to maintain stability in reserve value and safeguard against external risks. With the global economic landscape still uncertain, gold continues to act as a strategic cushion in India’s forex reserve portfolio.

Read More: RBI: Forex Reserves Strong Enough to Handle 11+ Months of Import Needs.

Conclusion

India’s latest forex data highlights a mixed picture, while the overall reserves saw a modest decline, the increase in gold and SDR holdings suggests a balanced and diversified reserve management approach by the RBI.

The coming weeks will offer more clarity on how external factors shape India’s forex dynamics going forward.

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