India Forex Reserves Hit Two-Month High After $40 Billion Inflow

India's foreign exchange reserves rose by $6.118 billion to $682.354 billion for the week ending July 24, 2026, reaching a nearly two-month high. This recovery follows a period of depletion after reserves peaked at $728.494 billion in February, when the central bank intervened to stabilize the rupee during Middle East geopolitical tensions.

To rebuild these reserves, the Reserve Bank of India introduced a concessional swap facility on June 5, which became operational on June 8, 2026. Between June 8 and July 31, these schemes attracted $40.816 billion in total inflows, a nearly 97% increase from the $20.718 billion recorded on July 17. The majority of these funds, $36.725 billion, arrived via Foreign Currency Non-Resident (Bank) deposits, while overseas foreign currency borrowings and external commercial borrowings contributed $2.575 billion and $1.516 billion, respectively.

The FCNR(B) deposit facility remains open until September 30, 2026, and is supported by a zero-cost hedging facility. The borrowing facilities for OFCBs and ECBs extend to December 31, 2026. Governor Sanjay Malhotra expressed confidence that these structural and capital flow measures will improve economic sentiment. Simultaneously, Prime Minister Narendra Modi has urged citizens since May 11 to conserve foreign exchange by limiting fuel consumption, gold purchases, and overseas travel.