India’s Forex Reserves Drop by $1.88 Billion to $686.23 Billion Amid Volatility

India’s foreign exchange reserves saw a decline of $1.877 billion, settling at $686.227 billion for the week ending November 28, 2025, as per data released by the Reserve Bank of India (RBI). This continues the recent downward trend observed over several weeks, despite the overall positive growth in the reserves for the year. The decline was largely attributed to a drop in Foreign Currency Assets (FCA), although gold reserves showed a notable increase during the same period.

Key Components of the Forex Reserves

India’s foreign exchange reserves consist of,

• Foreign Currency Assets (FCA)
• Gold Reserves
• Special Drawing Rights (SDRs)
• Reserve position with the IMF

Weekly Movements (ending November 28, 2025),

• FCA: Fell by $3.569 billion to $557.031 billion
• Gold Reserves: Rose by $1.613 billion to $105.795 billion
• SDRs: Increased by $63 million to $18.628 billion
• IMF Reserve Position: Rose by $16 million to $4.772 billion

Yearly Performance So Far

Despite short-term volatility, India’s forex reserves have increased by approximately $48 billion in 2025 so far. This follows an increase of $20 billion in 2024 and a strong $58 billion gain in 2023, which had helped offset the $71 billion decline in 2022.

Why Forex Reserves Fluctuate

Fluctuations in foreign exchange reserves are influenced by,

• RBI’s intervention in the currency market
• Movements in global currencies like the US dollar and Euro
• Valuation changes in gold and other assets

The RBI actively manages the rupee’s value by buying dollars when the rupee is strong and selling when it weakens, maintaining liquidity and preventing sharp currency fluctuations.

Surge in Gold Reserves: What It Signal

The increase in gold reserves this week is particularly noteworthy. Gold prices have been on an uptrend globally, driven by,

• Geopolitical tensions
• Global economic uncertainty
• Increased investment demand for safe-haven assets

India’s growing gold reserve base reflects its diversification strategy within the overall forex reserve framework.

Significance of Forex Reserves

Forex reserves act as a financial buffer for a country, helping in,

• Maintaining currency stability
• Ensuring liquidity in crisis situations
• Supporting imports and debt repayments
• Boosting investor confidence

A higher reserve base helps India navigate external shocks such as oil price spikes, currency depreciation, or global financial volatility.

Key Takeaways

• Latest Reserves: $686.227 billion (as of Nov 28, 2025)
• Weekly Change: Down by $1.877 billion
• FCA Decline: $3.569 billion
• Gold Reserves Increase: $1.613 billion
• SDRs and IMF Position: Small increases
• 2025 Performance So Far: +$48 billion cumulative growth
• RBI Role: Active in managing rupee volatility and maintaining reserve health