India's Forex Reserves Soar to Record $729 Billion Amid Strong Recovery

India's foreign exchange reserves have hit an all-time high of $729.3 billion as of August 21, surpassing the previous record set in late February this year. The Reserve Bank of India (RBI) reported a growth of $12.4 billion within just one week, with foreign currency assets rising by $9.48 billion to reach $591.33 billion during the same period.

The strong recovery is largely credited to a concessional swap window introduced on June 5 to attract capital inflows from overseas, which has already mobilised $72.8 billion in inflows as of August 21. The RBI expects total inflows could reach between $90 and $100 billion before the facility closes on August 31.

Gaura Sen Gupta, chief economist at IDFC First Bank, notes that the rise in reserves was partly due to revaluation effects and partly due to direct dollar buying by the central bank. Gold reserves have also contributed to this record accumulation, with a value increase of $2.8 billion to reach $114.22 billion during the same week.

The RBI's buffer now covers more than eleven months of India's goods imports and equals about 94 percent of the external debt outstanding at the end of March 2026. This comfortable cushion gives the central bank stronger capacity to manage volatility in the rupee and absorb any external economic shocks that might arise in coming months.