India’s foreign exchange reserves are comfortable enough to cover 90% of the current external debt and nearly 11 months of imports, the latest Economic Survey released on Friday said. India is still listed among the top four foreign exchange reserve holders in the world.

“India’s foreign exchange reserves stood at US$640.3 billion at the end of December 2024, which is sufficient to cover nearly 90 percent of the country’s external debt of $711.8 billion as of September 2024, reflecting a strong buffer against external risks,” the Economic Survey said.

After crossing the $700 billion mark, India’s foreign exchange reserves moderated to $640.3 billion at the end of December 2024. India’s foreign exchange reserves stood at $630 billion as of January 24.

Despite a decline of nearly $70 billion in reserves from its peak, India remains among the countries with the largest foreign exchange reserves in the world in 2024. It ranks fourth globally after China, Japan and Switzerland, the survey said.

Reserves, supported by net positive capital inflows, increased by $27.1 billion in 2024. Foreign currency assets contributed to the bulk of this increase, which strengthened India’s overall reserve position, it said.

The survey said rising global uncertainty has led to fluctuations in the composition of foreign exchange reserves. Gold bullion stocks reached their highest level since World War II in the calendar year 2024. This was largely driven by the accumulation of gold by emerging market central banks.

According to an IMF study, steady changes are underway in the global reserve system, including a gradual shift away from the dominance of the dollar and an increasing role for non-traditional currencies. (Economic Times)