India’s foreign exchange reserves surged to $693.318 billion for the week ended December 19, driven largely by the Reserve Bank of India’s aggressive gold purchases and strong global demand for the precious metal.

The central bank’s gold reserves rose by $2.623 billion, reaching $110.365 billion, reflecting the record-high appreciation of gold in 2025 amid global economic uncertainties. Gold purchases by RBI have played a pivotal role in bolstering the overall forex kitty.

At the same time, the foreign currency assets (FCA), which is the main part of the reserves, were $559.428 billion, reflecting a minor decrease over the week due to the fluctuations in value of non-US currencies like the euro, pound, and yen.

The RBI has previously pointed out that the reserves of India are more than 11 months’ worth of incoming merchandise, thus indicating the company’s ability to withstand external shocks and its readiness to meet foreign financing needs.

India’s forex reserves have come back very strongly since 2022. Reserves suffered a steep $71 billion drop in 2022, the next year saw a $58 billion increase, 2024 was a modest $20 billion increase, and 2025 is still foreseen to be the year with an approximate $47–48 billion expansion. The central bank’s gold accumulation strategy has been a key factor behind this recovery.

Analysts say that RBI’s continued gold purchases, coupled with steady foreign inflows and valuation gains, are likely to maintain the upward trajectory of India’s forex reserves in the near term, strengthening the country’s external stability.