RBI Governor’s Update on India’s Foreign Exchange Reserves and Policy Measures
On June 5, 2026, Sanjay Malhotra said that India’s foreign exchange reserves stood at a healthy $682.3 billion. This amount can cover imports for about 11 months and meets the standard adequacy metric of external debt coverage (≈ 89 %). He linked the strong reserve position to a set of policy initiatives aimed at strengthening the balance of payments.
Key Developments Announced
- Finalisation of agreements with major trading partners to improve export‑import flows.
- Permission for 100 % FDI in the insurance sector.
- Expansion of the ethanol blending programme to cut fuel‑import bills.
- Push for an energy transition and related investments.
- Relaxation of FDI rules for land‑bordering countries and liberalisation of the ECB framework.
- Commitment to maintain adequate liquidity in the banking system to support productive credit.
Important Facts and Trends
The reserve level of $682.3 bn is a slight decline from the all‑time high of $728.494 bn recorded in the week ending February 27, 2026. The dip followed the West Asia conflict, which pressured the rupee and forced the RBI to sell dollars. Weekly data show a fall of $7.511 bn to $681.384 bn in the week ended May 22, 2026. Earlier, the reserve stood at $686.801 bn in the week to January 2, 2026<