MUMBAI, Aug 29: India’s foreign exchange reserves climbed by $12.4 billion in the week ended August 21, reaching a historic high of $729.3 billion, aided significantly by dollar inflows mobilised through a special deposit scheme backed by the Reserve Bank of India.
The latest increase surpassed the previous record of $728.5 billion registered on February 27, 2026, before the outbreak of the US-Iran conflict. The subsequent rise in crude oil prices, along with pressure on the rupee, led to intervention by the RBI and contributed to a decline in the reserves, which fell to $666.9 billion by June 26.
Foreign currency assets (FCA), which account for the largest share of the country’s reserves, increased by $9.5 billion during the latest week to $591.3 billion. Gold reserves also recorded a substantial rise of $2.8 billion, taking the total value of the precious metal holdings to $114.2 billion.
The latest weekly gain marks a significant recovery after the sharp decline witnessed earlier in the year. RBI interventions in the foreign exchange market had been aimed at containing excessive volatility in the rupee amid higher energy prices and changing global financial conditions.
For the financial year so far, the country’s total reserves have expanded by $38.2 billion from their level at the end of March 2026. FCA alone have risen by $39.1 billion, exceeding the overall increase, while gold holdings have declined by $1.2 billion during the period.
The central bank’s recent efforts to strengthen dollar liquidity have played an important role in rebuilding the reserve position. In June, the RBI and the government introduced a concessional USD-INR foreign exchange swap facility aimed at encouraging inflows through FCNR(B) deposits, overseas foreign currency borrowings and external commercial borrowings.
The special facility has attracted an estimated $65 billion to $73 billion in inflows ahead of its scheduled closure on August 31, providing additional support to the country’s external sector position.
The rise in reserve assets also reflects the RBI’s broader efforts to manage currency-market volatility while maintaining adequate buffers against external shocks.
Historically, the largest weekly jump in India’s reserves was recorded in the week ended August 27, 2021, when the International Monetary Fund made a major allocation of Special Drawing Rights (SDRs) to member countries.
The latest record strengthens India’s external financial cushion and provides greater resilience against fluctuations in global commodity prices, capital flows and currency markets.