Indias foreign exchange reserves surged to a record high in September, supported by strong foreign currency inflows following the RBIs concessional swap measures. The reserves provided cover for 11.2 months of goods imports (as on September 18) and more than 100 per cent of the external debt outstanding as at end-March 2026. Meanwhile, West Asia tensions and high crude oil prices caused the Indian rupee (INR) to depreciate for most of August. Strong FCNR(B) deposits led to brief recoveries in early September, but these gains reversed in the later part of the month on account of higher crude oil prices . In real effective terms, the INR appreciated in August driven by higher domestic inflation vis-vis major trading partners and appreciation of the INR in nominal effective terms.
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