Sources of Variation in Foreign Exchange Reserves in India
Sources of Variation in Foreign Exchange Reserves in India during April-September 2021
Earlier today, the Reserve Bank of India released balance of payments (BoP) data for July-September 2021 on its website (www.rbi.org.in). On the basis of these data, the sources of variation in foreign exchange reserves during April-September 2021 are detailed below.
Sources of Variation in Foreign Exchange Reserves: April-September 2021
During April-September 2021, there was an increase in the foreign exchange reserves, the sources of which are set out in Table 1.
@: Difference, if any, is due to rounding off.
Note: ‘Other items in capital account’ apart from ‘Errors and Omissions’ include SDR allocation, leads and lags in exports, funds held abroad, advances received pending issue of shares under FDI and capital receipts not included elsewhere and rupee denominated debt.
On a balance of payments basis (i.e., excluding valuation effects), foreign exchange reserves increased by US$ 63.1 billion during April-September 2021 as compared with US$ 51.4 billion during April-September 2020. Foreign exchange reserves in nominal terms (including valuation effects) increased by US$ 58.4 billion during April-September 2021 as compared with US$ 66.9 billion in the corresponding period of the preceding year (Table 2).
The valuation loss, reflecting the appreciation of the US dollar against major currencies, amounted to US$ 4.7 billion during April-September 2021 as against a valuation gain of US$ 15.5 billion during April-September 2020.
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