Mumbai, September 12, 2026 (Yes Punjab News)
India has emerged as the world’s fourth-largest holder of foreign exchange reserves after a record surge in dollar inflows pushed the country’s forex kitty to an all-time high of $785.7 billion, according to data compiled by Bloomberg.
India’s reserves increased by a record $44.9 billion during the week ended September 4, helping it overtake Russia and move into fourth place globally, behind China, Japan and Switzerland.
The increase came despite a $2.59-billion decline in the gold reserves component to $113.81 billion as gold prices fell during the week.
A larger forex reserve provides the Reserve Bank of India (RBI) greater room to manage volatility in the rupee and intervene in both spot and forward currency markets by releasing dollars when required.
The sharp increase in reserves has also resulted in excess liquidity in the banking system following strong foreign currency inflows. The RBI has consequently stepped up measures to absorb surplus funds.
The central bank has announced a Rs 1 lakh crore open market operation (OMO) sale of government securities in three tranches. It will sell bonds worth Rs 50,000 crore on September 17, followed by Rs 25,000 crore each on September 21 and September 28. The auctions will use the multiple-price method through a multi-security auction.
Earlier, the RBI had absorbed more than Rs 3.53 lakh crore through a one-day Variable Rate Reverse Repo (VRRR) auction on Monday. The tool is used to withdraw excess liquidity from the banking system.
The liquidity surplus has largely followed unprecedented foreign exchange inflows generated by the RBI’s special dollar-rupee forex swap facility for FCNR(B) deposits, Overseas Foreign Currency Borrowings (OFCB) and External Commercial Borrowings (ECB).
Launched on June 8, the facility attracted around $73 billion in foreign exchange inflows in less than 11 weeks. The response prompted the RBI to advance the closure of the FCNR(B) window to August 31 from the earlier September 30 deadline, after the facility achieved its objective ahead of schedule.
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