India Forex Reserves Rise $7.26 Billion to $674.19 Bn on FCA, Gold

Foreign currency assets and gold reserves led a $7.26-billion rise in India’s forex kitty in the week ended July 3, RBI data released on July 10 showed, reversing the previous week’s $5.65-billion decline.

Key Takeaways

• India’s foreign-exchange reserves rose $7.26 billion to $674.193 billion for the week ended July 3, led by increases in foreign currency assets and gold reserves.
• Foreign currency assets (FCA), the largest component, climbed $4.51 billion to $545.578 billion.
• Gold reserves added $2.669 billion to reach $105.205 billion; SDRs and India’s IMF reserve position rose marginally.
• The gain reverses a $5.65-billion drop in the week ended June 26, when reserves had fallen to $666.933 billion.
• Reserves remain $54.3 billion below the record $728.494 billion touched in the week ended February 27, before the West Asia conflict pressured the rupee.
• The RBI’s FCNR-B swap facility and its ECB/OFCB swap window are running in parallel, but economists caution that it is too early to attribute this week’s reserve rise specifically to these measures..

Reserves Rebound After Sharp Weekly Drop

India’s foreign-exchange reserves rose by $7.26 billion to $674.19 billion in the week ended July 3, led by increases in foreign currency assets and gold reserves, RBI data showed. The increase comes a week after reserves had dropped $5.65 billion to $666.93 billion on June 26, driven largely by a $5.39-billion decline in the reported value of gold reserves. All four components of the reserves, foreign currency assets, gold, SDRs, and India’s IMF reserve position, posted gains in the latest week.

Also Read: India’s Forex Reserves Rebound to $672.6B; Bank Credit Surges: 5 Market Signals to Watch

What’s Driving the Components

Source: RBI Weekly Statistical Supplement, data as of July 3, 2026

Foreign currency assets, which include the dollar-value impact of euro, pound, and yen holdings, accounted for the largest share of the increase, followed by gold.

FCNR-B, ECB Support Steps in Focus — But Causation Is Unclear

Banks have started mobilising deposits under the RBI-supported FCNR-B window, although publicly available data do not yet establish how much of the latest reserve increase came from these inflows.

Reuters previously reported that lenders could mobilise as much as $35-40 billion through FCNR-B deposits by September, although this remains an estimate rather than an RBI target.

Banks raised FCNR-B deposit rates by up to 300 basis points following the measures, a decision taken by the banks themselves, while the RBI’s role has been to bear the hedging cost on eligible three-to-five-year deposits.

Separately, the RBI operationalised swap facilities on June 8 for eligible PSU external commercial borrowings and overseas foreign-currency borrowings by AD Category-I banks, following the framework announced on June 5.

Eligible ECB drawdowns through December 31, 2026, may access the facility subject to the prescribed conditions; qualifying PSU ECBs and banks’ overseas borrowings can access a 1.5% annual swap facility, while eligible fresh FCNR-B deposits mobilised between June 8 and September 30 can be swapped at par.

Economists caution that it is too early to establish these schemes as the cause of this week’s specific increase. Currency valuation changes, gold-price movements, and RBI dollar purchases in the market may also have contributed, and a clearer picture is likely only after September.

Still Below the February Peak

Source: RBI Weekly Statistical Supplement; wire reports

Reserves are still $54.3 billion short of the all-time high hit in late February, before the West Asia conflict triggered rupee pressure and sustained RBI intervention.

Compared with end-March 2026, total reserves are lower by $16.92 billion, with gold down $10.19 billion and FCA down $6.71 billion over that stretch. On a year-on-year basis, reserves are down $25.54 billion even as gold holdings are up $20.36 billion.

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Bottom Line

Foreign currency assets and gold reserves drove the $7.26-billion weekly rebound, more than reversing the previous week’s decline. Reserves still sit well below February’s record, and whether the RBI’s FCNR-B and ECB-linked measures are contributing meaningfully, as opposed to valuation effects, will likely only be clear by September, per economists.

This article is for informational purposes only and does not constitute investment advice. Please consult a SEBI-registered financial advisor before making any investment decisions.