India's Forex Reserves Decline Amid Rising Gold Holdings

As of November 1, 2024, India's foreign exchange reserves have decreased by $2.6 billion, settling at $682.13 billion. This decline follows a peak of $704.885 billion in September 2024, reflecting the ongoing volatility in global markets [d04ac4de]. In contrast, India's gold reserves have increased by $1.2 billion, reaching a total of $69.8 billion. This surge in gold holdings is attributed to heightened geopolitical tensions and the need for a hedge against potential US economic sanctions [d04ac4de]. The share of gold in the country's forex reserves has risen dramatically, increasing over 210% since 2018, indicating a strategic shift in asset allocation [d04ac4de].

Despite the recent decrease, India's forex reserves have increased by $34.5 billion in the current financial year, which is sufficient to cover 11.2 months of imports. The Reserve Bank of India (RBI) continues to utilize these reserves to stabilize the Indian rupee amid fluctuating exchange rates [d04ac4de]. Deputy Governor Rabi Sankar has emphasized that the RBI is prepared for potential exchange rate volatility, particularly in light of the political landscape influenced by Donald Trump's presidency [d04ac4de].

In a broader context, Malaysia's foreign reserves have also seen significant growth, reaching $117.6 billion as of September 13, 2024, the highest level since December 2014. This increase reflects a strong external position, with reserves sufficient to finance 5.5 months of imports [5e148d45]. Meanwhile, other countries in the region, such as Bangladesh and the Philippines, are experiencing varying trends in their forex reserves, highlighting the dynamic economic landscape across Asia [2e5a7052][6ae02b59].

These developments in both India and Malaysia underscore the ongoing adjustments in monetary policies and economic strategies in response to global market conditions and geopolitical factors.