Forex reserves hit all-time high of $704.89 billion

“The foreign exchange reserves will likely rise to $745 billion by March 2026, giving the central bank more potential firepower to influence the rupee,” BofA said in a note earlier in the day, adding the monetary authority “seems relaxed about holding larger forex reserves, owing to its desire to build buffers against contingent external risks.

India has the world’s fourth-biggest foreign reserves as rising overseas inflows into the nation’s stocks and bonds have helped the Reserve Bank boost its stockpile to a record high. The amount provides stability to the rupee against external shocks, with the RBI using its reserves to limit extreme swings in the currency hovering near a record low, BofA said.

According to the weekly statistical supplement released by the RBI, foreign currency assets were up by $10.4 billion to $616 billion. Expressed in dollar terms, foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.