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RBI Data Show Foreign Exchange Reserves Ease, Bank Credit Stays Firm as Deposits Rebound
Editorial Photo: Mumbai, India โ€” RBI Data Show Foreign Exchange Reserves Ease, Bank Credit Stays Firm as Deposits ReboundRDU Global Media

RBI Data Show Foreign Exchange Reserves Ease, Bank Credit Stays Firm as Deposits Rebound

R

RDU Global Correspondent

BFSI & Fintech Desk

Mumbai, India 8h agoโ€ข4 min read

The Reserve Bank of India's latest weekly statistical supplement shows a modest weekly decline in foreign exchange reserves, even as India's banking system continued to expand credit and deposits at a healthy pace. The figures point to a financial system still growing steadily, with reserve movements reflecting market valuation shifts and external asset changes rather than a sharp stress signal.

The Reserve Bank of India's latest weekly statistical supplement paints a picture of a financial system moving through a period of steady expansion, even as foreign exchange reserves slipped over the week ended September 18, 2026. The data show India's total reserves at Rs 73,42,985 crore, or $765,901 million, down Rs 1,17,276 crore from the previous week. In dollar terms, the decline was $14,881 million, a reminder that weekly reserve movements can be shaped as much by valuation effects and asset rebalancing as by outright intervention or capital flow pressures.

The largest component of the reserve pile, foreign currency assets, fell to Rs 60,49,483 crore, or $630,980 million, a weekly drop of Rs 1,20,938 crore and $14,816 million. Gold holdings, by contrast, rose modestly to Rs 10,67,007 crore, or $111,292 million, up Rs 4,284 crore on the week. Special Drawing Rights eased slightly to Rs 1,79,657 crore, while India's reserve position in the International Monetary Fund also edged lower. Taken together, the numbers suggest that the weekly decline in overall reserves was concentrated in foreign currency assets, while gold continued to provide a partial offset.

Even with the weekly dip, the broader reserve position remains stronger than it was a year ago. Total reserves were up Rs 11,53,302 crore, or $63,331 million, compared with the same period last year. Foreign currency assets were also higher year-on-year by Rs 8,85,546 crore, while gold holdings were up Rs 2,49,630 crore. That year-on-year comparison is likely to matter more to policymakers and markets than the week-to-week movement, because it underscores that India continues to hold a substantial external buffer.

The banking system's latest business data also point to resilience. Scheduled commercial banks' aggregate deposits stood at Rs 2,76,23,066 crore as of September 15, 2026, down Rs 2,48,508 crore over the fortnight, but still up sharply by Rs 40,76,615 crore year-on-year. Deposit growth was 4.3% over the fortnight and 17.3% over the year, indicating that household and corporate savings continue to flow into the formal banking system. Time deposits remained the dominant source of funding at Rs 2,42,86,955 crore, while demand deposits stood at Rs 33,36,111 crore.

On the lending side, bank credit remained elevated at Rs 2,23,29,258 crore. Credit was marginally lower by Rs 57,894 crore over the fortnight, but rose Rs 34,26,398 crore from a year earlier, translating into year-on-year growth of 18.1%. Non-food credit accounted for nearly the entire lending book at Rs 2,22,19,537 crore, while food credit was Rs 1,09,721 crore. The data suggest that despite some short-term fluctuation, banks continue to extend credit at a pace consistent with a still-expanding economy.

The RBI's liabilities and assets statement also showed loans and advances to state governments at Rs 19,427 crore, up from Rs 14,958 crore in the previous week, though still below the level seen a year earlier. The central government's borrowing from the RBI remained at zero.

The weekly supplement includes an important technical note: the figures are provisional, and any difference is due to rounding off. It also notes that banking data incorporate the impact of the merger of a non-bank with a bank effective July 1, 2023. In another structural change, the Banking Laws (Amendment) Act, 2025 revised the definition of a fortnight from alternate Fridays to the 15th and last calendar day of a month, effective December 15, 2025. That change affects how the RBI and banks frame their reporting periods, and it is part of the broader effort to align statistical reporting more closely with calendar-based financial cycles.

For markets, the latest numbers are unlikely to trigger alarm. A weekly reserve decline of this size is not unusual, especially when foreign currency assets move with exchange rates and global asset prices. More importantly, the underlying banking data continue to show a system with strong deposit mobilisation and robust credit growth. Together, the figures suggest that India's external buffers remain substantial and its domestic financial intermediation continues to function with momentum, even as week-to-week reserve movements remain sensitive to global market conditions.

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Reported by RDU Global Correspondent. Formatted and verified using real-time institutional and journalistic wire feeds. Independent reporting adhering to the RDU Global Editorial Code of Conduct.

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