On 29th October 2024, the Reserve Bank of India (RBI) released its 43rd Half Yearly report from April to September 2024 on Management of Foreign Exchange Reserves (MFER).
- As per the report, India’s foreign exchange reserves position as on 18th October 2024 was projected at USD 688.27 billion, of which USD 598.24 billion in Foreign Currency Assets (FCA), Gold worth USD 67.44 billion, Special Drawing Rights (SDRs) of USD 18.27 billion and Reserve Tranche Position (RTP) of USD 4.32 billion.
Note:
i.The Department of External Investments and Operations (DEIO) under the RBI publishes the half-yearly reports on MFER to enhance transparency and levels of disclosure.
ii.The report has two parts, of which 1st part provides information regarding the movement of FERs, information on the external liabilities vis-à-vis the reserves, adequacy of reserves, among others, during the half-year under review. While other part of the report provides information on objectives of reserve management, statutory provisions, risk management practices, among others.
Key Findings:
i.According to the RBI’s latest Half-Yearly report, FER has increased from USD 646.42 billion (as on 31st March, 2024) to USD 705.78 billion (as on 30th September 2024),
ii.The report showed India’s FER on a balance of payments (BoP) basis, excluding valuation effects, has increased by USD 5.2 billion during April-June 2024 against the increase of USD 24.4 billion during the same period of last year.
- While, FER in nominal terms (including valuation effects) has increased by USD 5.6 billion during April-June 2024 against the increase of USD 16.6 billion during April-June 2023.
iii.As per the report, RBI’s net forward asset (payable) was at USD 14.58 billion as on 30th September, 2024.
iv.The RBI report revealed that India’s net International Investment Position (IIP) (which includes both external financial assets and liabilities) as on 30th June 2024 was negative at USD 368.3 billion compared to negative net IIP of USD 379 billion as on 30th June 2023, this indicates that the sum of all external liabilities is more compared to the external assets in both periods.
- During the period between 30th June 2023 and 30th June 2024, the external assets and external liabilities increased by USD 108.4 billion and USD 97.7 billion, respectively.
v.As on 30th June 2024, FER cover of imports (on BoP basis) was at 11.2 months compared to 11.3 months on 31st March 2024.
- The ratio of short-term debt (original maturity) to reserves has increased from 19.7% (as on 31st March 2024) to 20.3% (as on 30th June 2024).
- The ratio of volatile capital flows (including combined portfolio inflows and outstanding short-term debt) to reserves increased from 69.8% (at end March 2024) to 70.1% (at end-June 2024).
vi.As per the report, the RBI held total 854.73 metric tonnes of Gold as on 30th September 2024, of which 510.46 metric tonnes of gold were held domestically.
- Also, the percentage share of gold in the net FER increased from 8.15% (as at end-March 2024) to about 9.32% (as at end-September 2024).
About Reserve Bank of India (RBI):
Governor- Shaktikanta Das (25th Governor of RBI)
Headquarter- Mumbai, Maharashtra
Established- 1 April, 1935
