India's Forex Reserves Dip by USD 1.27 Billion: Gold Value Slumps
India's foreign exchange reserves dropped by USD 1.27 billion in the week ending Oct 23, primarily driven by a decline in gold value.
India's forex reserves fall by USD 1.269 billion, bringing the total to USD 719.748 billion for the week ending October 23. According to the latest data released by the Reserve Bank of India (RBI) on Friday, the primary driver behind this weekly decline was a significant drop in the valuation of gold holdings.
The Gold Factor and Asset Shifts
The RBI's Weekly Statistical Supplement reveals a sharp contrast between different asset classes within the national reserves. The value of gold reserves witnessed a substantial slide, falling by USD 2.650 billion to settle at USD 103.150 billion.
Despite the overall dip, not all components were in the red. The foreign currency assets, which constitute the largest portion of India's reserves, actually saw an uptick. These assets increased by USD 1.358 billion, reaching a total of USD 593.205 billion during the same week.
Other Reserve Components
- Special Drawing Rights (SDRs): Recorded a modest increase of USD 27 million, bringing the total to USD 18.605 billion.
- IMF Reserve Position: India's position in the International Monetary Fund saw a slight decrease of USD 4 million, ending the week at USD 4.787 billion.
It is worth noting that despite this recent weekly contraction, India's total foreign exchange reserves remain robust. The current figures are USD 28.640 billion higher than the levels recorded at the end of March 2026.
Banking Sector Growth Trends
Beyond the foreign exchange data, the RBI's supplement provided key insights into the domestic banking landscape as of October 15, 2026, highlighting a period of accelerated growth compared to the previous year.
Credit and Deposits Surge
Bank credit has shown a strong upward trajectory, growing by 18.2 per cent year-on-year. This is a significant jump from the 11.6 per cent growth seen during the same period last year. The total outstanding bank credit now stands at Rs 227.43 lakh crore.
Similarly, aggregate bank deposits have seen a marked increase. Deposits grew by 16.7 per cent year-on-year, compared to a 9.5 per cent increase in the previous year, reaching a total of Rs 278.76 lakh crore.
Broad Money Supply
The data also pointed toward an expansion in the broad money supply (M3). As of October 15, M3 grew by 16.0 per cent year-on-year, a sharp rise from the 9.2 per cent growth reported in the corresponding period of the preceding year.