India’s foreign exchange reserves witnessed a massive surge of $14.167 billion to reach $701.36 billion in the week ended January 16, the Reserve Bank of India (RBI) data showed on Friday. In the preceding week that ended January 9, the country’s foreign exchange reserves had increased by $392 million.

The largest component of the foreign exchange reserves, Foreign Currency Assets (FCA), increased by $9.65 billion in the week ended January 16, reaching $560.51 billion. FCA includes the value of other major global currencies such as the yen, euro and pound, in addition to the dollar, expressed in dollar terms.

The gold reserves also increased by $4.6 billion to $117.45 billion in the reporting period. According to the RBI, the value of Special Drawing Rights (SDRs) decreased by $35 million to $18.70 billion in the week ended January 16. The value of the reserve position in the IMF decreased by $73 million to $4.684 billion.

Previously, on October 17, 2025, the country’s foreign exchange reserves had reached $702.25 billion. The all-time high for India’s foreign exchange reserves is $704.89 billion, recorded in September 2024.

Foreign exchange reserves are very important for any country and reflect its economic condition. They also play a significant role in stabilising the exchange rate. For example, if the rupee comes under pressure against the dollar and its value falls, the Central Bank can use its foreign exchange reserves to prevent the rupee from depreciating further against the dollar and maintain exchange rate stability.

Rising foreign exchange reserves also indicate a large inflow of dollars into the country, which strengthens the economy. Furthermore, an increase in reserves makes it easier for the country to conduct international trade. The steady rise in foreign exchange reserves comes amid strong capital inflows into the country, with India witnessing a notable increase in foreign direct investment commitments during the current financial year.