Forex reserves rise $7.3 billion as FCNR & ECB flows pick up

MUMBAI: India's foreign exchange reserves appear to be showing early signs that targeted central bank measures to attract overseas capital might be gaining some traction, although experts believe a more accurate assessment of the programs will be possible only later - perhaps in September.

The country's stockpile of assets denominated in foreign currencies rose $7.26 billion to $674 billion in the week ended July 3, the latest data from the Reserve Bank of India (RBI) showed.

Of the total reserves, foreign currency assets increased $4.5 billion to $545.5 billion, while gold reserves increased $2.6 billion to $105.2 billion during the week.


This suggests that inflows from the special FCNR(B) deposit plan and the concessional forex swaps on external commercial borrowings (ECB) are starting to trickle in. The RBI announced a limited period scheme to attract foreign currency inflows on June 5 and economists have since projected an inflow of $40 - $70 billion.

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Economists, however, said it is too early to conclusively attribute the increase to these measures alone. "Inflows from FCNR(B) have started to trickle in, but it is too premature to draw a conclusion that the recent increase in foreign currency assets is because of the inflow. Banks are still trying to attract foreign deposits, and a proper picture would be seen after September," said Madan Sabnavis, chief economist, Bank of Baroda.

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Experts also suggest the increase in foreign currency assets would be a function of dollar buying from the RBI in the currency market. Total reserves, however, have declined from the record high of $728 billion hit in February 2026.