India's forex reserve at record high, credit rating improved to stable in two decades: PM Modi

New Delhi, Aug 23 (IANS) Prime Minister Narendra Modi said on Saturday that India's foreign exchange reserves have surged to record high.

He also added that S&P Global Ratings has upgraded India's long-term sovereign credit rating for the first time in two decades.

He was addressing The Economic Times World Leader Forum in New Delhi.

"We have missed several buses, but now India has decided we would not only miss any bus also take the driving seat," he said.

India's forex reserves stood at $695.10 billion as of August 15, 2025, marking one of the highest levels in the country's history and reinforcing its financial resilience amid global economic headwinds.

The Reserve Bank of India (RBI), in its latest Weekly Statistical Supplement, reported a $1.48 billion increase over the previous week, driven primarily by gains in foreign currency assets.

This upward momentum follows a $4.75 billion jump in the preceding week, signalling sustained capital inflows and strategic reserve management.

The largest component of the reserves -- foreign currency assets -- rose by $1.92 billion to $585.90 billion, reflecting valuation gains and a stable external balance.

Meanwhile, India's gold reserves saw a marginal decline of $2.16 billion, settling at $86.16 billion, likely due to global price corrections or portfolio adjustments.

Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) increased by $41 million, while the country's reserve position with the IMF rose by $15 million to $4.754 billion.

These figures underscore India's growing financial buffer and its ability to withstand external shocks.

RBI Governor Sanjay Malhotra, following the latest monetary policy review, affirmed that the current reserve level is sufficient to cover 11 months of imports -- a critical benchmark for economic stability.

He emphasised that India's external sector remains resilient, with key vulnerability indicators showing improvement.

The forex buildup in 2025 has been substantial, with a cumulative increase of $53 billion so far, following a $20 billion rise in 2024 and a $58 billion gain in 2023.

This trajectory contrasts sharply with the $71 billion decline recorded in 2022, highlighting a turnaround in India's external account dynamics.

As global markets continue to grapple with volatility, India's robust forex reserves offer a strategic cushion, enabling the RBI to manage currency fluctuations and maintain investor confidence.

The latest figures not only reflect prudent fiscal stewardship but also signal India's growing stature in the global financial landscape.

Similarly, the S&P has improved India's rating from 'BBB-' to 'BBB' with a stable outlook, marking the country's first rating boost in nearly two decades.

The announcement, made on August 14, 2025, comes as a recognition of India's robust economic fundamentals, sustained fiscal consolidation, and improved policy predictability.

The upgrade reflects S&P's confidence in India's ability to maintain strong growth momentum, with projected GDP expansion averaging 6.8 per cent annually over the next three years.

The agency cited the government's commitment to fiscal discipline, enhanced infrastructure investment, and effective monetary policy as key drivers behind the decision.

India's short-term rating was also revised upward to 'A-2' from 'A-3', while the transfer and convertibility assessment was raised to 'A-' from 'BBB+'. These changes signal improved investor confidence and could lower borrowing costs for both the government and Indian corporations.

--IANS

sktr/khz