India’s foreign exchange reserves declined by USD 6.711 billion to USD 717.064 billion in the week ending February 6, according to the latest data released by the Reserve Bank of India (RBI). The decline came after the country’s forex reserves had touched a record high of USD 723.774 billion in the previous week.

The drop in reserves during the reported week was mainly due to a sharp fall in gold reserves, even as foreign currency assets (FCA) — the largest component of forex reserves — increased. According to RBI data, foreign currency assets rose by USD 7.661 billion to USD 570.053 billion, while gold reserves declined by USD 14.208 billion to USD 123.476 billion.

Despite the weekly decline, India’s forex reserves have remained on an overall upward trend in recent weeks. RBI data shows that the country’s reserves have increased by around USD 56 billion so far in 2025. In comparison, foreign exchange reserves rose by just over USD 20 billion in 2024, while India added about USD 58 billion in 2023, following a decline of around USD 71 billion in 2022.

After its latest monetary policy review earlier this month, the RBI said that India’s foreign exchange reserves are sufficient to cover more than 11 months of merchandise imports, indicating a strong external position. The central bank also noted that the external sector remains resilient, and India is well-placed to meet its external financing requirements.

Foreign exchange reserves are assets held by the central bank in foreign currencies such as the US dollar, euro, Japanese yen, and pound sterling, along with gold and other reserve assets. The RBI uses these reserves to manage liquidity and stabilise the rupee, typically buying dollars when the rupee strengthens and selling them during periods of depreciation.