This news is a bit disappointing for the government which is trying to boost the country’s economy. There has been a decline in India’s foreign exchange reserves amid dealing with the challenges of American high tariffs. In the week ending October 3, this reserve decreased by $ 276 million to $ 699.96 billion. Information in this regard was given by the Reserve Bank of India (RBI) on Friday.

reduction in foreign exchange reserves

Even in the previous week, India’s total foreign exchange reserves had declined by $2.33 billion to $700.24 billion. According to the RBI, foreign currency assets — a major component of total reserves — declined by $4.05 billion to $577.71 billion in the week ended October 3. These assets, expressed in dollar terms, are also affected by fluctuations in the value of other currencies such as the euro, pound and yen.

However, during the same period, the country’s gold reserves increased by $3.75 billion to reach $98.77 billion. Apart from this, Special Drawing Rights (SDR) also increased by $ 25 million to $ 18.81 billion, while India’s reserves with the International Monetary Fund (IMF) decreased by $ 4 million to $ 4.66 billion.

Rupee strengthened

Rupee showed slight strength in the foreign exchange market. On Friday, the rupee closed with a gain of 10 paise at 88.69 per dollar (provisional). The rupee got this support from the strength in domestic stock markets and fall in crude oil prices. According to foreign exchange traders, RBI intervention also supported the rupee. However, the strength of the US dollar limited the rise of the rupee. The rupee kept trading in the range of 88.50 to 88.80 throughout the day.

Market and investors situation

There was an atmosphere of strength in the stock markets.

BSE Sensex rose 328.72 points to close at 82,500.82.

Nifty 50 closed at 25,285.35, up 103.55 points.

Foreign institutional investors (FIIs) were also buyers and bought shares worth Rs 1,308.16 crore. Meanwhile, the dollar index, which gauges the dollar’s strength against six major currencies, fell 0.21% to 99.32. At the same time, Brent crude oil futures prices declined by 0.61% to $ 64.85 per barrel. Overall, even though there has been a slight decline in foreign exchange reserves, the position of the Indian economy currently remains balanced due to the strong domestic market, foreign investment and stability of the rupee.

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Gold Reserves in India: After a huge American tariff over India, New Delhi has completely changed its old methods. That is, the RBI has adopted a new investment strategy in gold against the US dollar. It is clear from the data of the RBI and the American treasure department that this time India has invested very low in American Treasury Bills in June as compared to the last four years.

US Treasury Bills fall
According to data from the Economic Times, India had a $ 227 billion treasury bills in June 2025. Whereas last year the same figure was $ 242 billion.

Actually, many countries around the world are now changing their old strategy. India has increased the gold reserves on one side in June this year, while the investment in American Treasury Bills has been reduced. Despite this, India is still among the top 20 countries in the world in terms of investing in American Treasury Bills.

What is the reason?
Global stress and trade war are considered to be a major reason for this change. According to Madan Sabnavis, Chief Economist of Bank of Baroda, many countries including China and Brazil are working on this strategy. In the last year, a lot of ups and downs in American currency have been seen.

RBI figures show that on 28 June 2024 India had 840.76 MT of gold. At the same time, by 27 June 2025, foreign exchange reserves had increased to 979.98 MT. It is a clear indication that India is giving priority to gold in its safety and investment strategy.

China’s condition
In December last year, the stock of American Treasury Bills reached the lowest level. Talking about China, China had a $ 756 billion treasury bills in June 2025, compared to $ 780 billion in the same period last year.

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