India Forex Reserves 2024

Foreign exchange reserves are held by a country's central bank, supporting its currency and financial stability. Indian forex reserves, managed by the Reserve Bank of India help in safeguarding the nation's economic interests. These reserves reflect India's resilience and strategic financial planning. 

Over the years, India's forex reserves have seen significant growth from $29.3 billion in March 1997 to $648.562 billion in April 2024. Keep reading to learn the importance of India's forex reserves in more detail.

What is the Forex Reserve of a Country?

Foreign exchange reserves are foreign assets held by a country's central bank. These assets are used to support its liabilities, such as the local currency and reserves held by financial institutions or the government. For instance, if the Reserve Bank of India owns US government bonds, those bonds are considered foreign assets for India. 

Generally, central banks hold foreign currency, which does not generate income, and foreign government bonds, which do generate income through interest payments. The income from these assets is received in the foreign currency they are denominated in, like US dollars for US government bonds and Japanese yen for Japanese government bonds.

What is the Forex Reserve of India?

India's foreign exchange reserves are assets held by the Reserve Bank of India (RBI) in foreign currencies. These reserves serve as a safeguard, ensuring that the country can fulfil its external obligations and maintain liquidity. The Indian forex reserves play a crucial role in stabilising the nation’s currency and economy. 

These reserves have experienced notable fluctuations, reflecting changes in the country's economic environment and global financial conditions. India’s forex reserves include the following components:

• Foreign Currencies

Foreign currency reserves are the most significant part of India's forex reserves. They consist of major currencies like the US Dollar, Euro, and British Pound, providing liquidity and facilitating international trade transactions.

• Gold

Gold reserves serve as a hedge against inflation and provide stability during economic uncertainties. Including gold in the reserves adds value and security, reflecting its traditional significance in the Indian economy.

• Special Drawing Rights (SDRs)

SDRs are international reserve assets created by the IMF to supplement member countries' foreign exchange reserves. They enhance international liquidity and contribute to stabilising the global monetary system.

• Reserve Portion in IMF

The reserve portion in the IMF reflects India's allocated share and voting rights in the International Monetary Fund, showcasing India's role and influence in this global financial institution.

Current Forex Reserve of India

According to RBI as of April 12, 2024, the current forex reserve of India is Rs. 54,01,575 crore ($648.562 billion) forex reserves. Here are the specific amounts of Indian forex reserves held in different components:

Foreign Exchange Reserves of India Since 1991

In 1991, India's forex reserves amounted to $5.8 billion. India's reserves rose to $29.3 billion by March 1997. Finally, in 2004, India's forex reserves surpassed the $100 billion milestone for the first time. 

During the financial year 2009, India sold around $35 billion worth of dollars in the spot markets due to a 22% depreciation in the rupee against the dollar. Furthermore, in the same period, India purchased 200 tonnes of gold from the IMF, totalling around $6.7 billion. 

In 2020, amidst the Covid-19 pandemic, India's forex reserves surpassed the $500 billion mark in June, marking a significant milestone. A year later, in 2021, Indian forex reserves exceeded $600 billion for the first time ever. Thus, India’s forex reserves have grown six times in the previous two decades. 

India Forex Reserves Chart & Ranking

Here is a table mentioning the growth of Indian forex reserves since the past and other essential data related to it (in Rs crore):

The following table mentions the rank of Indian forex reserves in 2024 compared to the other countries:

Final Words

Indian forex reserves showcase the nation’s economic resilience and smart financial planning. In times of uncertainty, these reserves serve as a reliable safeguard, ensuring stability and confidence in India’s economic prospects. Furthermore, they bolster the national currency, help with debt settlement and encourage trading activities.