India has $527 billion in foreign currency assets, over $100 billion more than Saudi Arabia and the Russian Federation
India has secured the fourth spot in the world for foreign exchange reserves as of the second quarter of 2023. A report by FOREX.com shows that India has $527 billion in foreign currency assets, over $100 billion more than Saudi Arabia and the Russian Federation, which stand 5th and 6th, respectively.
A recent Reserve Bank of India report shows that India's total foreign exchange reserves stood at $595 billion in Q2 2023. This includes foreign currency assets, gold, special drawing rights (SDRS, or supplementary reserve assets maintained by the IMF) and reserve position in the IMF.
As per the report, China had the highest forex reserves in Q2 2023, at $3.1 trillion. Japan and Switzerland ranked 2nd and 3rd with $1.1 trillion and $809 billion, respectively.
In Q3 2023, India recorded a marginal decrease of $9 billion in forex reserves as per RBI data. At the end of September 2023, India’s forex reserves stood at $586 billion. The most affected component of forex reserves is foreign currency assets, which decreased by $7 billion. Also read: India forex reserves 2023: Exploring current status and historical trends
Other components of India’s forex reserves remained essentially unchanged from Q2 to Q3 of 2023. The gold reserves of India, which earlier amounted to $43.8 billion, decreased to $43.7 billion. India’s SDRs also witnessed a mere $101 million decrease. Furthermore, India’s reserve position in the IMF remained unchanged at $5 billion.
The change in India’s forex reserves is due to the intervention by the Reserve Bank of India in the spot and forward markets to stabilise the rupee. RBI Governor Shaktikanta Das said last week that the forex reserves of India are sizeable and very comfortable.
The intervention by the RBI has resulted in a considerable stabilisation in the rupee since Q2. At the end of Q2, the rupee traded at 82.098, and at the end of Q3 2023, the rupee closed at 83.177 against the dollar.
India’s forex reserves reached an all-time high in September 2021 when they touched $642.4 billion. They decreased in the later years when the central bank intervened to defend the rupee amid the pressure created by the various developments in the global markets.