India’s external sector showed stability in mid-January 2026 as the country’s foreign exchange reserves registered a modest increase. According to the latest weekly data released by the central bank, the overall reserves rose despite a decline in foreign currency assets, supported mainly by a strong jump in gold reserves.
Why in News?
India’s foreign exchange reserves increased by $392 million to $687.19 billion for the week ended January 9, 2026, as per data released by the Reserve Bank of India.
Overall Trend in Forex Reserves
- The rise in reserves comes after a sharp decline in the previous reporting week, when the total reserves had fallen by $9.809 billion to $686.80 billion.
- The latest increase indicates partial recovery and reflects week-to-week volatility influenced by currency movements, valuation changes, and changes in gold prices.
- India continues to maintain one of the largest forex reserve buffers globally, strengthening its ability to manage external shocks.
Foreign Currency Assets: Mixed Movement
- For the week ended January 9, Foreign Currency Assets (FCAs), the largest component of forex reserves, declined by $1.124 billion to $550.866 billion.
- FCAs include assets held in major foreign currencies such as the US dollar, euro, pound sterling, and Japanese yen.
- These assets are affected not only by actual inflows and outflows but also by exchange rate fluctuations among non-US currencies.
Gold Reserves Provide Major Support
- The most significant contributor to the increase in reserves was gold. India’s gold reserves jumped by $1.568 billion to $112.83 billion during the reporting week.
- The rise reflects higher international gold prices and underscores the RBI’s strategy of maintaining a diversified reserve portfolio.
- Gold acts as a hedge against currency volatility and global financial uncertainty.
SDRs and IMF Reserve Position
- India’s holdings of Special Drawing Rights (SDRs) declined marginally by $39 million to $18.739 billion.
- SDRs are international reserve assets created by the International Monetary Fund (IMF) to supplement member countries official reserves.
- Additionally, India’s reserve position with the IMF fell by $13 million to $4.758 billion during the week.
Components of Forex Reserves
India’s forex reserves consist of four key components,
- Foreign Currency Assets (FCAs), Gold Reserves, Special Drawing Rights (SDRs), and Reserve Position in the IMF.
- Movements in reserves depend on trade flows, capital movements, valuation changes, and RBI’s market operations.
Question
Q. India’s foreign exchange reserves stood at how much in the week ended January 9, 2026?
A. $650.19 billion
B. $672.80 billion
C. $686.80 billion
D. $687.19 billion