India Rises to Fourth in Global Forex Reserves

Sep 12, 2026

73 min

Sep 12, 2026 12:31

India becomes world’s 4th largest forex holder

## Record Forex Reserves

India has climbed to the fourth position globally in terms of foreign exchange reserves, reaching a record $785.7 billion. This significant increase was largely driven by the Reserve Bank of India's (RBI) foreign currency non-resident (bank) deposits scheme, which brought in $73 billion in a short span.

## Surpassing Russia

With this surge, India has overtaken Russia, positioning itself just behind China, Japan, and Switzerland. The increase in reserves occurred despite a $2.59 billion drop in gold reserves due to falling gold prices.

## Economic Stability

The robust forex reserves enhance India's economic stability, providing the RBI with greater capacity to stabilize the rupee during periods of volatility. The RBI can now more effectively intervene in currency markets to prevent drastic fluctuations in the rupee's value.

## Managing Liquidity

To manage the excess liquidity resulting from the influx of foreign currency, the RBI announced a Rs1 lakh crore open market operation (OMO) sale of government bonds. These sales are scheduled in three tranches throughout September.

## Monetary Policy Measures

Additionally, the RBI conducted a Variable Rate Reverse Repo (VRRR) auction to absorb surplus cash, raising over Rs3.53 lakh crore. This move is part of the central bank's strategy to maintain financial stability amid the large inflows from the FCNR(B) scheme.

## Early Closure of FCNR(B) Window

The overwhelming response to the FCNR(B) scheme led the RBI to close the window ahead of schedule, achieving its objectives faster than anticipated.

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