Reserve Bank Governor Sanjay Malhotra stated on June 5, 2026, that foreign exchange reserves stood at a healthy $682.3 billion, enough to cover imports for about 11 months. He made the remarks while presenting the second bi-monthly monetary policy for the fiscal year and noted that various policy steps are set to bolster the balance of payments. These include pacts with key trading partners, full foreign direct investment in insurance, an ethanol blending program, efforts toward energy transition, relaxed FDI rules for neighboring countries, and liberalization of the external commercial borrowing framework. As of May 29, 2026, reserves totaled $682.3 billion, meeting standard adequacy measures such as import cover for 11 months and covering 89.1 percent of external debt. Malhotra added that reserves offer a solid cushion against external shocks, with regulatory and market tools available to maintain orderly conditions. Reserves fell by $7.511 billion to $681.384 billion in the week ending May 22. They had reached a record $728.494 billion by February 27 before declining amid the West Asia conflict, which pressured the rupee and prompted central bank dollar sales. Earlier, reserves were at $686.801 billion in the week to January 2, 2026. The governor also said the Reserve Bank would maintain suitable liquidity to support economic needs and policy transmission. He observed that India managed elevated tariffs and trade uncertainties in 2025-26 despite global turbulence, though rising energy prices and ongoing trade policy doubts could increase the current account deficit in 2026-27. A services trade surplus and inward remittances are expected to offer some relief.
