India forex reserve: The treasury received a huge amount of wealth, foreign exchange reserves reached $698 billion

India forex reserve: According to recently released government data, India's retail inflation rate rose to 2.07% in August 2025 from 1.61% in July. This increase has come at a time when India is facing a massive tariff of 50% imposed by the US. This situation can be challenging for the Indian economy, as rising inflation can affect the purchasing power of consumers. However, this rate is still within the target range of 2-6% of the Reserve Bank of India (RBI), which may not require immediate changes in policy rates by the central bank.

Strength in foreign exchange reserves

On the other hand, the Reserve Bank of India has given promising news. As of September 5, 2025, India's foreign exchange reserves increased by $ 4.03 billion to a record level of $ 698.26 billion. This is a significant increase from $ 694.23 billion last week (August 29). This increase strengthens India's economic stability as strong foreign exchange reserves help in imports and payment of external debt.

Different components of reserves

• Foreign currency assets (FCA): This is the largest part of the reserves, which increased by $540 million to $584.47 billion. It includes major currencies like euro, pound and yen.
• Gold reserves: Gold reserves increased by $3.53 billion to $90.29 billion this week. This reflects stability in gold prices globally and India's strategic purchases.
• Special drawing rights (SDRs): It fell by $34 million to $18.74 billion.
• Reserve position in IMF: It increased by $2 million to $4.75 billion.

RBI strategy: Rupee stability

The Reserve Bank of India intervenes in the foreign exchange market to prevent excessive fluctuations in the value of the rupee. For this, RBI buys and sells dollars from time to time. This move of the central bank is to maintain stability in the market rather than targeting a fixed exchange rate. Strong foreign exchange reserves help RBI to implement this strategy effectively.

Importance of weekly data

RBI releases foreign exchange reserve data every Friday, which includes data for the previous week. This data reflects four major components: foreign exchange assets, gold reserves, special drawing rights, and reserve position in the IMF. These figures are important for investors, policymakers and analysts, as they are an important indicator of India's economic health.