Increase in India's foreign exchange reserves and bank credit by the end of August

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Highlights

In the week ending August 28, 2026, India's total foreign exchange reserves increased by 11.48 billion U.S. dollars to reach 740,803 billion U.S. dollars.
By August 15, 2026, total bank deposits in India rise by 14.7 percent to 269,313.46 billion rupees and bank credit increases by 18.3 percent to 220,077.64 billion rupees.
On August 28, 2026, RBI's net liquidity absorption reaches 4,021.24 billion rupees, indicating efforts to control surplus liquidity.

This article was translated from the original. Read the original version by our correspondent here.

Latest RBI Bulletin Data

According to the Reserve Bank of India, as per the Reserve Bank of India's Weekly Statistical Supplement, total foreign exchange reserves increased by 11.48 billion U.S. dollars to 740,803 billion U.S. dollars in the week ending August 28, 2026. This includes foreign currency assets at 600.67 billion U.S. dollars, gold reserves at 116,409 billion U.S. dollars, SDRs at 18.81 billion U.S. dollars, and the IMF reserve position at 4,914 billion U.S. dollars.

In RBI's assets and liabilities, loans and advances to state governments declined from 107.88 billion rupees on August 21, 2026, to 31.16 billion rupees on August 28, 2026. For the central government, this item shows a zero balance.

As of August 15, 2026, total deposits with scheduled commercial banks in India reach 269,313.46 billion rupees, reflecting a 14.7 percent increase compared to a year earlier. During the same period, bank credit stands at 220,077.64 billion rupees, up 18.3 percent year-on-year, while non-food credit also rises 18.3 percent to 218,936.28 billion rupees.

Impact on Liquidity, Money Supply, and the Banking Sector

Money supply M3 reaches 322,945.03 billion rupees as of August 15, 2026, up 14.2 percent year-on-year. Currency with the public increases by 12.9 percent and time deposits with banks by 14.2 percent, while demand deposits record a 15.6 percent annual growth.

During liquidity operations from August 24 to August 30, 2026, RBI's net action remains consistently absorptive. On August 28, 2026, net absorption reaches 4,021.24 billion rupees, indicating that the central bank remains active in absorbing surplus liquidity from the system.

These figures indicate that deposit and credit growth in India's banking system remains strong, while the increase in foreign exchange reserves supports external stability. At the same time, the trend of liquidity absorption shows that the RBI is focused on maintaining balanced monetary conditions.

Our previous report on liquidity management through reverse repo and market stabilization schemes under RBI's money market operations highlighted that the central bank continuously adjusts its measures in line with market conditions. That article also emphasized that these steps aim to maintain orderly conditions and stability in the financial system while supporting short-term funding needs.

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