New Delhi/Mumbai _ India’s foreign exchange reserves took a dip recently, falling by $6.711 billion to $717.064 billion in the week ending February 6, 2026. This came right after they hit a record high of $723.774 billion the week before. The main reason for this drop was a fall in the value of gold held by the Reserve Bank of India (RBI) because gold prices went down in the world market. The RBI has about 880 tonnes of gold, and its value dropped from around $137.684 billion to $123.476 billion. But let’s be clear: no gold is missing or stolen. It’s just that when gold prices fall, the total value in dollars goes down too, even if the amount of gold stays the same. On the other side, foreign currency assets, which are a big part of the reserves, actually went up by $7.661 billion to $570.053 billion. This helped balance out some of the loss from gold. Some people online got worried and spread stories about gold going missing, but fact-checks on platforms like X cleared it up. Economists say these ups and downs happen every week and are normal. They don’t mean there’s a big problem with India’s economy.
This news came from the RBI’s weekly data release. Reserves are like a safety net for the country, helping pay for imports and keeping the rupee stable. When they go up or down, it can affect how people see the economy. But in this case, the drop is mostly on paper because of market changes, not because India spent a lot or lost anything.
Understanding India’s Forex Reserves
Forex reserves are the money and assets India holds in foreign currencies, gold, and other things like Special Drawing Rights (SDRs) from the International Monetary Fund (IMF). The RBI looks after them. As of February 2026, India has one of the biggest reserves in the world, over $700 billion. This is good because it covers more than 11 months of imports, meaning India can buy things from other countries without worry for a long time.
The reserves have four main parts: foreign currency assets, gold, SDRs, and reserve position in the IMF. Foreign currency assets are the biggest, making up about 80% of the total. Gold is next, around 17%. SDRs and IMF position are smaller. The RBI uses these reserves to manage the rupee’s value, like selling dollars if the rupee gets too weak.
Over the years, India’s reserves have grown a lot. From around $300 billion ten years ago, they doubled because of more foreign money coming in, like investments and exports. In 2025, they crossed $700 billion for the first time. The record high was $723.774 billion in the week ending January 30, 2026, when gold prices were high and added $14.361 billion to the total. But markets change fast, and so do the values.
The Recent Drop in Reserves
In the week ending February 6, 2026, the reserves fell by $6.711 billion. This was mostly because gold’s value dropped by $14.208 billion. Gold prices in the world market went down sharply that week, so the same amount of gold was worth less in dollars. The RBI didn’t sell any gold; it was just a change in price.
At the same time, foreign currency assets rose by $7.661 billion. This could be because the RBI bought more dollars or other currencies, or because the value of euros and pounds went up against the dollar. But SDRs fell by $132 million to $18.821 billion, and the IMF reserve position dropped by $32 million to $4.715 billion. Overall, these small changes added to the net drop.
Compared to the previous week, this is a big swing. But experts say it’s common. “Forex reserves can go up or down by billions each week due to market moves,” said an economist from a private bank. The RBI releases this data every Friday, so people watch it closely.
How Gold Valuation Works
Gold is a key part of reserves because it’s seen as safe. The RBI holds 880.18 tonnes of gold, most of it in vaults in India and some abroad. The value is calculated based on the current market price. If gold is $2,000 per ounce one week and $1,800 the next, the total value falls without touching the gold.
In early February 2026, gold prices fell because of stronger US dollar and less worry about inflation. This hit the value hard. From $137.684 billion to $123.476 billion is a 10% drop, matching the price change. “It’s not a loss; it’s unrealized. If prices go up again, the value rises,” explained Sujan Hajra, chief economist at Anand Rathi Group.
The RBI has been buying more gold in recent years to spread risks. Gold’s share in reserves went from 6-7% to over 17%. This helps if the dollar weakens. But it also means more ups and downs from gold prices.
Rise in Foreign Currency Assets
While gold pulled down the reserves, foreign currency assets pushed them up. These are dollars, euros, pounds, and yen that the RBI holds. The $7.661 billion increase shows the RBI might have bought currencies to control the rupee or from incoming investments.
Foreign money flows into India through exports, remittances from Indians abroad, and investments in stocks and bonds. In January 2026, exports were strong, adding to reserves. Also, if other currencies gain against the dollar, their value in reserves goes up.
This offset much of the gold loss. Without it, the drop would have been bigger. Economists say this shows the reserves are still healthy.
Misleading Claims About Missing Gold
Some news headlines said “gold wiped out” or “big loss in gold reserves,” which made people think gold was stolen or sold secretly. On social media like X, posts claimed “India’s gold is missing” or “RBI lost billions.” But that’s not true. Fact-checkers quickly pointed out it’s just a price change, not physical loss.
For example, one X user posted, “No gold is missing; it’s valuation adjustment due to market prices.” Another said, “RBI holds the same 880 tonnes; check official data.” These clarifications went viral, calming worries. The RBI doesn’t comment on every rumor, but their data is open for anyone to see.
Such stories spread because people don’t understand how reserves work. “Sensational headlines get clicks, but they mislead,” said a financial journalist. In past years, there were real cases of gold being moved, like bringing it back from abroad, but nothing like that here.
Economists’ Views on Fluctuations
Experts are not worried about this drop. “Weekly changes are routine. Look at the trend over months,” said Pronab Sen, former chief statistician of India. Reserves have grown $100 billion in the last two years, showing strength.
They say India is in a good spot. With high reserves, the RBI can handle rupee ups and downs. “It’s like a buffer for bad times,” added Hajra. If oil prices rise or foreign investors pull out, reserves help.
Some economists think the RBI might buy more gold if prices stay low. “Diversifying is smart,” said one. But for now, the focus is on keeping the economy growing.
This dip follows a pattern. In January 2026, reserves jumped because gold prices rose. Now, they fell back. Over time, they stay high.
Impact on the Economy and Rupee
High reserves make India look strong to investors. They help keep the rupee stable, around 83-84 to the dollar in early 2026. If reserves drop too much, the rupee might weaken, making imports costlier.
But this small dip won’t hurt much. India’s economy is growing at 7-8%, with good exports and low inflation. Reserves cover imports for over a year, better than many countries.
The government and RBI watch this closely. Finance Minister Nirmala Sitharaman has said, “Our reserves are robust and support growth.” No big changes are expected from this.
Global Context and Future Outlook
Around the world, central banks hold gold for safety. The US has over 8,000 tonnes, China about 2,000. India’s 880 tonnes put it in the top 10. With gold prices volatile due to US interest rates and geopolitics, values will keep changing.
Looking ahead, reserves might rise if foreign inflows continue. Economists predict $750 billion by end of 2026. But gold prices could swing again.
In short, this dip is no big deal. It’s part of how markets work. India’s economy is on solid ground.
FAQs
What caused the drop in India’s forex reserves?
The drop of $6.711 billion to $717.064 billion was mainly due to a $14.208 billion fall in gold value from lower world prices. Foreign currency assets rose $7.661 billion, but it wasn’t enough to offset fully. SDRs and IMF position also dipped slightly.
Is any gold missing from RBI’s holdings?
No, no gold is missing. The RBI still holds 880 tonnes. The value dropped because gold prices fell, not because any gold was sold or lost. It’s a normal market change.
How much gold does India hold?
The RBI holds 880.18 tonnes of gold, worth $123.476 billion as of February 6, 2026. Most is stored in India, some abroad for safety.
What are foreign currency assets?
These are foreign moneys like dollars, euros, held by RBI. They increased by $7.661 billion to $570.053 billion, helping balance the gold loss.
Why do reserves fluctuate weekly?
Reserves change due to market prices, RBI actions, and foreign flows. Gold and currency values shift with global markets. Economists say weekly ups and downs are normal; look at long-term trends.
What does this mean for the common person?
It doesn’t affect daily life much. High reserves keep the rupee stable and economy strong. No need to worry about this dip.