India Forex Reserves Drop by $2.49 Billion to $719.55 Billion as Bank Credit Surges 19.5 Percent
India's foreign exchange reserves contracted by $2.49 billion to settle at $719.55 billion (₹67,58,986 crore) for the week ended November 6, 2026, according to the latest Weekly Statistical Supplement released by the Reserve Bank of India (RBI). Despite the weekly decline in the external cushion, the domestic banking sector demonstrated continued strength, led by double-digit annual growth in both lending and deposit mobilization.
Breakdown of Forex Reserves
The decline in India's headline reserves during the week was primarily driven by a pullback in foreign currency assets, which form the largest slice of the central bank's foreign holdings.
Key components of the forex kitty as of November 6, 2026, include:
- Foreign Currency Assets (FCA): Declined by $232 million during the week to reach $591.35 billion.
- Gold Reserves: Stood higher at $104.80 billion, providing an offsetting cushion against currency valuation shifts.
- Special Drawing Rights (SDRs): Stood at $18.61 billion.
- Reserve Position in the IMF: Accounted for $4.79 billion.
Even after the marginal weekly dip, India's overall reserve position remains well above the $700 billion mark, maintaining an adequate import cover and shielding the rupee against abrupt external shocks or foreign capital outflows.
Bank Credit and Deposit Expansion
Data for scheduled commercial banks (SCBs) as of the fortnight ended October 31, 2026, underscored sustained domestic economic momentum. Both credit deployment and deposit mobilization showed vigorous year-on-year and fortnightly gains.
- Bank Credit: Total outstanding bank credit reached ₹23,182,499 crore, representing an annual increase of 19.5%. On a fortnightly basis, credit rose by ₹439,720 crore.
- Aggregate Deposits: Total deposits climbed to ₹28,251,076 crore, expanding 16.9% compared to the corresponding period last year. Deposits rose by ₹375,166 crore during the fortnight.
The figures indicate that while credit demand across retail, commercial, and industrial segments remains broad-based, banks have also accelerated deposit mobilization to match the lending pace, narrowing the systemic funding gap.
Liquidity Management and Government Advances
The central bank's daily liquidity tracking between November 2 and November 8, 2026, showed persistent net liquidity absorption from the banking system. On November 6, 2026, net liquidity absorption stood at ₹213,730 crore, indicating comfortable surplus cash conditions across the interbank system.
In its balance-sheet disclosures, the RBI noted that loans and advances to state governments dropped from ₹20,463 crore on October 30 to ₹15,415 crore as of November 6, 2026. Meanwhile, loans and advances to the central government remained at zero, reflecting adequate cash balances with the Centre.
Market Implications
For equity and bond investors, the RBI's data reflects healthy economic indicators. The 19.5% credit growth highlights enduring business confidence, consumer spending, and healthy balance-sheet expansion among Indian lenders. At the same time, a deposit growth rate of 16.9% eases earlier market concerns regarding intense competition for deposits and rising funding costs. While global macro conditions keep foreign currency assets volatile, the substantial reserve buffer of nearly $720 billion offers the RBI sufficient room to anchor financial stability.
