India’s foreign exchange reserves fell by $12.95 billion to $734.61 billion in the week ended October 2, 2026, the fourth straight weekly decline, according to Reserve Bank of India data. The India forex reserves figure is now $51.1 billion below the record $785.7 billion reached in the week ended September 4.
The fall reflects dollar sales by the RBI to support the rupee amid higher crude prices and capital outflows, along with valuation losses on non-dollar currencies and gold held in the reserves, reports said.
What Is the Breakdown of India’s Forex Reserves?
Foreign currency assets, the largest component, dropped $10.7 billion to $604.7 billion. Gold reserves fell $2.3 billion to $106.4 billion. Special Drawing Rights (SDRs) rose $15 million to $18.7 billion, while India’s reserve position with the IMF fell $15 million to $4.8 billion.
In the previous week, ended September 25, reserves had recorded a record weekly drop of $18.3 billion to $747.6 billion. Earlier in the year, reserves had fallen to $666.9 billion in the week ended June 26 during the West Asia crisis before recovering sharply, helped by a concessional FX swap window that opened on June 8 and drew $143.6 billion in inflows by September 18, of which FCNR(B) deposits were $132.98 billion. That window closed on August 31.
Why Is the RBI Selling Dollars?
Market participants estimate the RBI net sold about $30 billion in September. IDFC FIRST Bank chief economist Gaura Sen Gupta estimated that about $7.5 billion was sold in the latest week, with the rest of the fall mainly due to valuation effects. These are market estimates, not official RBI disclosures. The central bank is intervening through spot and forward transactions and dollar-rupee sell/buy swaps.
The rupee has weakened 1.62% against the dollar since early September, and a state bank dealer said the RBI is trying to keep it from reaching 97 per dollar, with Brent crude above $100 a barrel. Gold fell 2.5% in the reported week to $4,177 an ounce, while the dollar index rose 1.12% to 102.10.
How Comfortable Is India’s External Position?
RBI Governor Sanjay Malhotra has said reserves provide import cover of about 11 months and equal 94.4% of external debt. At $734.61 billion, reserves remain well above the June low, though the pace of decline over the past four weeks has drawn market attention.
Market and Trade Reaction
Pressure on the rupee has been linked to elevated crude prices, foreign investor selling in equities and a stronger dollar. The current spot rate of the rupee was not given in the source report, and official figures on intervention have not been released, so the scale of dollar sales cannot be confirmed.
What Happens Next?
The RBI releases reserves data weekly. Investors will watch the next release for the week ended October 9, crude oil movements, FPI flows and RBI intervention. The Monetary Policy Committee, which raised the repo rate to 5.50% this month, next meets on December 2-4, 2026.
Frequently Asked Questions
What are India’s forex reserves now?
India’s forex reserves stood at $734.61 billion as of the week ended October 2, 2026, down $12.95 billion from the previous week.
Why did India’s forex reserves fall?
The fall was due to RBI dollar sales to defend the rupee amid higher crude prices and outflows, plus valuation losses on gold and non-dollar assets.
What was India’s record forex reserve level?
Reserves peaked at a record $785.7 billion in the week ended September 4, 2026.
Source: RBI weekly data as reported by Business Standard (October 9, 2026) and ANI/The Tribune.
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