Key points
- Indian Forex Reserve is increasing by $ 2.7 billion a week expiring July 25
- Foreign currency assets (FCAS) increased by $ 1.31 billion to $ 588.93 billion
- RBI continues to intervene in coins markets to prevent excessive fluctuations of rupee
- According to experts, Trump’s 25% invoice could threaten Indian exports
India’s foreign exchange reserves increased by $ 2.7 billion a week ending July 25, hitting a strong $ 698.19 billion, Reserve Bank of India (RBI) said on Friday.
The spike amidst ongoing heat by US President Donald Trump shows the central bank strict efforts Strengthen the economy against world uncertainties while maintaining stability in rupee.
What is the story behind this development
In accordance with reportThe increase mainly comes from foreign currency assets (FCAS), which increased by $ 1.31 billion to $ 588.93 billion.
FCAS, a key element of stocks, not only reflects the dollar farms, but also the floating values of other important coins, such as the euro, the pound and the yen who were removed in the RBI funds.
Gold reserves also played an important role and increased by $ 1.2 billion to $ 85.7 billion, which is an indication of RBI’s strategy.
Meanwhile, SDRS, the IMF’s reserve currency, increased by $ 126 million to $ 18.8 billion, while India’s reserve position with the IMF improved $ 55 million to $ 4.75 billion.
RBI’s balance in Forex markets
The Central Bank is actively interfering with Forex markets to cope with excessive volatility in Rupia’s exchange rate.
However, RBI officials argue that these moves are expected to secure normal market conditions instead of defending any particular level of rupee.
This approach measurement has helped India tackle global coins, while keeping its stocks healthy.
Inflows of direct foreign investment and FPI show a strong investment feeling
The last monthly RBI report also revealed another encouraging trend. According to the report, direct foreign investment (FDI) in India rose to $ 8.8 billion in April 2025, from $ 5.9 billion in March and $ 7.2 billion in April 2024.
Almost half of these inputs were directed to construction and business services, indicating increasing confidence in India’s industrial and digital development history.
India’s call as an investment hub further increased its ranking as the 16th largest foreign investment destination in the world.
Between 2020 and 2024, the country attracted an amazing $ 114 billion in Greenfield investments in the digital economy, the highest among all developing areas.
Foreign portfolio investors (FPIS) also showed renewed excitement, drawing $ 1.7 billion in Indian shares in May 2025. This marks the third consecutive month.
Analysts attribute this optimism to a mixture of domestic and global players, including the ceasefire of India-Pakistan, the reduction of US-China commercial tensions and the strongest of the expected corporate profits in the 4th quarter of FY25.
What will follow for India’s forex stocks?
With stocks approaching the milestone of $ 700 billion, economists suggest that India is well -launched against external shocks.
However, the RBI remains careful, balancing liquidity management with the need to maintain rupee stable. As global investors are still betting on India’s growth trajectory, the country’s forex reserves are likely to remain a key barometer of its economic durability.
Donald Trump’s invoices obstruct Indian economy
In the midst of positive growth in India’s foreign exchange reserves, a significant economic threat is slowing against India, which could prevent its economic growth. This week, US President Donald Trump announced a 25% invoice to Indian imports, which is valid on August 7, citing the markets of Russian oil and India military equipment as support for Russia in the ongoing Russian-Ukrainian conflict.
“The invoice (and the penalty) proposed now by the US is higher than what we had predicted and therefore is likely to be a headline in the development of GDP of India.
However, there is hope that the Indian government and the US government will complete a bilateral trade agreement by the fall of 2025.
“While this move is unfortunate and will have a clear relationship with our exports, we hope that this imposition of higher invoices will be a short -term phenomenon and that a permanent trade agreement between the two sides will soon be finalized,” said Harsha Vardhan Agarwal, president of the FICCI.
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