Our Bureau
Mumbai
India has overtaken Russia to become the world’s fourth-largest holder of foreign exchange reserves after its reserves recorded a historic weekly increase of $44.9 billion, reaching an all-time high of $785.7 billion in the week ended September 4, according to Reserve Bank of India data. India now trails only China, Japan and Switzerland.
The sharp rise was driven primarily by foreign-currency inflows mobilised through measures introduced by the RBI, including its concessional foreign exchange swap facilities. These measures attracted substantial funds from non-residents and overseas lenders, strengthening the country’s external financial position.
The RBI’s Foreign Currency Non-Resident (Bank), or FCNR(B), deposit window accounted for the largest share of the inflows. Banks mobilised approximately $127.2 billion through the scheme, while overseas foreign-currency borrowings and external commercial borrowings contributed to the overall inflow of about $136.4 billion by August 31.
Foreign currency assets, the largest component of India’s reserves, rose by $47.5 billion during the week to $648.2 billion. However, gold reserves declined by around $2.6 billion to $113.8 billion, partly offsetting the overall increase.
The record accumulation marks a strong recovery from the pressure witnessed earlier this year, when geopolitical tensions and currency volatility had weighed on India’s reserves. The larger reserve cushion is expected to improve the RBI’s ability to manage external shocks, support orderly currency-market conditions and meet international payment obligations.