India Forex Data Bank
(This is for information and educational purposes only. This should not be
construed as a recommendation or investment advice even though the author is a CFA
Charterholder. Please consult your financial adviser before taking any
investment decision. Safe to assume the author has a vested interest in stocks
/ investments discussed if any.)
This is a data bank related to Indian economy, especially on topics such as, foreign exchange reserves, foreign exchange intervention, foreign investment flows to India and other topics.
The data points here contain flow data in a year, stock data at the end of the year and yearly changes / growth rates. Government of India follows April-March fiscal year for several decades.
But RBI follows April-March financial year (FY) only since 2021-22. RBI followed July-June FY till 2019-20; 2020-21 (July-March) was the transition year.
Readers need to be aware of the RBI's recent fiscal year change before interpreting the data.
Sources of information for the data bank are given at the end of the blog.
This is a typical list of data points:
CAD Current account deficit
CRB Contingent Risk Buffer
Debt ratio Short-term debt to forex reserves ratio
FCA Foreign currency assets; accretion / depletion also
FDI by India FDI by Indian companies abroad
FDI flows Foreign investment flows
FDI repatriated FDI repatriated out of India
Fed funds rate US Fed's target federal funds rate
Forex intervention Net USD sale / purchase by RBI
Forex reserves Foreign exchange reserves; accretion / depletion also
FPI AUC Equity and debt assets owned by foreign investors
FPI flows Equity and debt portfolio investment flows
FCA Foreign currency assets; accretion / depletion also
FDI by India FDI by Indian companies abroad
FDI flows Foreign investment flows
FDI repatriated FDI repatriated out of India
Fed funds rate US Fed's target federal funds rate
Forex intervention Net USD sale / purchase by RBI
Forex reserves Foreign exchange reserves; accretion / depletion also
FPI AUC Equity and debt assets owned by foreign investors
FPI flows Equity and debt portfolio investment flows
Gold reserves RBI gold reserves and physical gold
Gross FDI Gross FDI to India
Import cover Import cover of forex reserves
Net FDI to India FDI to india minus FDI by India
RBI surplus RBI surplus transfer to Government
Net FDI to India FDI to india minus FDI by India
RBI surplus RBI surplus transfer to Government
Reserves adequacy Adequacy of forex reserves or are they excess?
RoE on FCA RBI's rate of earnings on foreign currency assets
USD-INR USD-INR financial- and calendar-year end data
USD-INR change Dollar-rupee exchange rate yearly gain or loss
RoE on FCA RBI's rate of earnings on foreign currency assets
USD-INR USD-INR financial- and calendar-year end data
USD-INR change Dollar-rupee exchange rate yearly gain or loss
Volatile flows Volatile capital flows to forex reserves ratio
Collating data from various sources is a challenge as the data points are released on different dates at specific time intervals.
The author has over the years written various blogs on management of India's foreign exchange reserves, India's gold reserves, foreign direct investment, foreign portfolio flows, external debt, central bank balance sheet, current account deficit, balance of payments, central bank's foreign exchange intervention, Indian exchange rate volatility, earnings on forex reserves and others.
The articles on these subjects can be found here: Blog of Blogs Theme-wise under the topic Forex.
The blog will be updated periodically with new data exhibits and charts. Newer updates will be at the top. This will enable readers to access all the related data at one place.
Brief notes and relevant blog weblinks, if any, will be added along with the data. You can click on the data exhibits for a better view.
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Update 24Jun2024: Chart 16:
Net foreign direct investment (FDI) flows to India in FY 2023-24 were just USD 9.8 billion, the lowest in 17 years.
All data on gross FDI flows, FDI repatriated, FDI to India, FDI by India and Net FDI to India >
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Update 24Jun2024: Chart 15:
From India's external vulnerability point of view, a current account deficit of up to 2 per cent is considered as sustainable. Anything above 2 per cent is likely to make India vulnerable to external shocks.
As such, the CAD of 0.7 per cent of GDP in FY 2023-24 is too low from India's economic growth perspective. To support India's growth, the country needs at least a minimum CAD of 2 per cent.
As can be seen from data below, during 2011-12 and 2013-14, India experienced high unsustainable CAD of more than 4 per cent which led to forex crisis (severe weakness in rupee exchange rate) in 2011-12 and 2012-13.
During 2020-21, India experienced, on an annual basis, current account surplus (0.9 per cent) for the first time since 2003-04. Due to draconian lockdowns following COVID-19 Pandemic, India suffered severe contraction (minus 5.8 per cent real GDP growth) in economic growth in 2020-21. And this led to huge fall in imports relative to exports -- ultimately resulting in current account surplus for the year.
15-year CAD data from 2009-10 to 2023-24 >
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Update 20Jun2024:
"We want to diversify the deployment of our forex reserves in more currencies and in different kind of assets, particularly gold. (portfolio diversification of India's forex reserves)
"Gold prices, in the long term, generally go up. So, gold is considered as a kind of permanent hedge against exterrnal uncertainities and challenges. We naturally buy gold whenever there is an opportune moment.
"Yes, building up gold reserves is a part of our reserve deployment and we will continue with that depending on the international prices."
"Gold prices, in the long term, generally go up. So, gold is considered as a kind of permanent hedge against exterrnal uncertainities and challenges. We naturally buy gold whenever there is an opportune moment.
"Yes, building up gold reserves is a part of our reserve deployment and we will continue with that depending on the international prices."
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Update 20Jun2024:
Swati Bhat of Reuters asks:
"I just wanted to understand if there is a change in policy and is it because of the geopolitical tensions (and decognition of Russian reserves) that we are trying to keep more gold within India now?"
RBI governor Shaktikanta Das answers:
"You see, with regard to the movement of the gold. In fact, I am quite surprised that it is appearing in the media so late. We release half-yearly data of our gold reserves and that clearly says how much is held in India and how much is held outside India. I was expecting the media to pick up the end-September 2023 data. Nobody picked it up and we were really surprised. I was expecting the end-March 2024 data also to be picked up by the media and nobody noticed it. Basically, the quantum of gold held by the RBI outside the country was static for a long time. But in the recent years, the data shows that the Reserve Bank has been buying gold as a part of its reserves management, and the quantum held outside was going up. We have domestic capacity now, and we felt part of the gold should be stored within the country. That is it. Nothing more should be read into it."
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Update 15Jun2024: Chart 14:
RBI bought 200 metric tonnes of gold from International Monetary Fund (IMF) during October 19-30, 2009.
After buying gold from IMF, RBI kept quiet for eight years. It started buying physical gold again at the end of 2017.
Between 2017 and now, RBI has accumulated additional gold amounting to 270 metric tonnes. As of 26Apr2024, RBI holds 827.7 metric tonnes of gold.
Gold held abroad:
Since 1991, RBI has been holding 65.49 tonnes of gold abroad; the
amount was constant till Oct2009, when RBI bought 200 tonnes of gold
from IMF. Then, the quantity of gold held abroad (kept with Bank of England and Bank for International Settlements) increased to 265.49
tonnes including gold bought from IMF.
As the below chart reveals, gold held abroad increased from 265.49 tonnes in Mar2010 to 453.52 tonnes in Mar2022, which was the peak for gold kept abroad and later gold held abroad started coming down.
So, what caused the change of heart in RBI to bring back gold from abroad to India? What happened in Mar2022?
Between Mar2022 and Mar2024, RBI gold holdings rose from 760.4 tonnes to 822.1 tonnes. In the same period, gold held in India rose from 295.8 tonnes to 408.3
tonnes; while gold held abroad declined from 453.5 tonnes to 387.3
tonnes -- clearly indicating RBI brought back, at least 50 tonnes, gold
from foreign vaults (kept with Bank of England and Bank for International Settlements) to Indian vaults.
Possible reasons for RBI shifting physical gold from abroad to India are discussed in this blog (see updates 25May2024 and 10Nov2023 in this blog).
You could also check X Posts: Tweet dated 25May2024 and Tweet 10Nov2023 when the author found out the revelation seven months before the popular media got scent of it. And the media got the amount of gold brought back from abroad wrong.
The following chart further reveals the following:
> the percentage of physical gold held in India rose from 38.9 per cent in Mar2022 to 49.7 per cent in Mar2024
> it may be added the percentage of physical gold held in Mar1995 was as high as 83.5 per cent -- over the years, the percentage of gold held in India declined till Mar2022
(Note: RBI gold holdings in 1998-99 declined due to redemption of Gold Bonds scheme - source: page 133 of RBI Annual Report 1998-99)
Details of RBI's physical gold holdings are available from three RBI sources:
1). RBI annual reports (data as at end of March every year)
2). RBI Half-Yearly Report on Foreign Exchange Reserves (data as at end-March and end-September every year) -- this report contains more comprehensive data on RBI gold reserves
3). RBI Monthly Bulletin (data at weekly intervals, but available only in RBI Bulletins released every month). It may be added RBI was not revealing volume data of physical gold in its monthly RBI Bulletins prior to 2021; but started revealing volume data only since Jan2021 (with weekly volume data from 20Nov2020 onwards).
Tweet 07Mar2022 RBI gold reserves
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Update 15Jun2024: Charts 12 to 13:
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Update 12Jun2024: Charts 10 and 11:
FPI flows to India in equity segment have been negative to an extent of nearly Rs 30,000 crore in CY 2024; while debt flows are positive with Rs 75,000 crore in the same period.
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Update 10Jun2024: Chart 9:
RBI Rate of Earnings on FCA: Rate of earnings generated by RBI on its foreign current assets, which are part of its forex reserves: 25-year data from 1999-2000 to 2023-24 (related blog 08Mar2020 and another 10Nov2023):
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India Forex Reserves Data: Blog updated with latest data (the blog has data from 1999-2000 onwards) >
Update 10Jun2024: Chart 8:
Table
showing India's foreign exchange reserves data from FY 2009-10 till FY
2023-24. Table also shows accretion and depletion of forex reserves
during a financial year; USD sale and purchase by RBI during a financial
year and USD - INR level at the end of a financial year >
Update 09Jun2024: Charts 6 and 7:
Exhibit 3: Financial year-wise
yearly gain for USD-INR: Data include not only year-wise changes but
also 5-year change (annualised). For example, between end-Mar2019 and
end-Mar2024, the USD appreciated by 3.8 per cent annualised rate. And
between end-Mar2011 and end-Mar2016, the annualised USD appreciation vs
INR was much higher at 8.2 per cent.
Exhibit 4: Calendar year-wise yearly gain for USD-INR:
Data include not only year-wise changes but also 5-year change
(annualised). For example, between end-Dec2016 and end-Dec2021, the
annualised appreciation for USD vs INR is only 1.8 per cent; whereas
between end-Dec2007 and end-Dec2012, it was 6.8 per cent annualised.
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RBI
provided the rate of earnings for FY 2023-24 in its annual report
released on 30May2024. The rate of earnings on FCA for FY 2023-24 was
4.21 per cent.
In the exhibit below, you can compare columns 6 and 7:
whenever there is a rise in global bond yields and interest rates
(as represented by Fed funds rate), RBI's rate of earnings increases in
general as can be seen in years 2023-24, 2022-23 and 2018-19. (see blog on Fed Funds rate)
Clarification on the above table:
Data in columns 2,3 and 7 (surplus transfer, CRB and rate of earnings) are as per RBI financial year (notes 3 and 4 in the table).
But data in columns 4, 5 and 6 (FCA year-end, FCA accretion / depletion and Fed funds rate) are as per Govt of India fiscal year that is, Apr-Mar for all the years.
Data in columns 2,3 and 7 (surplus transfer, CRB and rate of earnings) are as per RBI financial year (notes 3 and 4 in the table).
But data in columns 4, 5 and 6 (FCA year-end, FCA accretion / depletion and Fed funds rate) are as per Govt of India fiscal year that is, Apr-Mar for all the years.
Rate of earnings in graphical representation:
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Update 09Jun2024: Charts 1 to 3:
Table 1: One
of the biggest economic policy failures of PM Modi gov't is the
precipitous fall in FDI in the past three years consecutively.
In fact, net foreign direct investment (FDI) to India in FY 2023-24 is just USD 10.6 billion, which is the lowest in 17 years.
Data from 2006-07 to 2023-24: Gross FDI inflows, FDI repatriated,
FDI to india, FDI by India and net FDI; and their annual growth rates
are given here:
While gross FDI to India in FY 2023-24 remains stagnant at USD 71 billion, FDI repatriated surged by 51% to USD 44.4 billion.
While gross FDI inflows to India are up 97% (CAGR 7%) in the past 10 years,
FDI repatriated out of India is up by a staggering 740% ( CAGR 23.7%).
Table
3: FDI inflows are down 13.7% (CAGR -1.5%) in the past 10 years from
USD 30.8 billion in 2013-14 to USD 26.6 billion in 2023-24, as per
latest data from RBI.
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Related blogs on Forex:
Why RBI Won't Favour A Strong Rupee 03Jun2024
Currency Pairs: How to Calculate Depreciation or Appreciation 01Jun2024
RBI's Record Surplus Transfer to Government of India 23May2024
India Foreign Exchange Reserves Comfortable 10Nov2023
When Will Federal Reserve Stop Hiking Interest Rates 25Feb2023
Exit India Policy by Foreign Investors 10Jul2022
Slowing Foreign Direct Investment to India 25May2022
India Foreign Exchange Reserves Data 18May2022
India forex reserves in four charts 08Mar2022
Foreign investors' waning interest in Indian stocks 21Jan2022
(includes write-up on FPI investment limits in G-Secs, SDLs and corporate bonds)
RBI Gold holdings 07Mar2022
RBI announces USD INR Buy Sell Swaps 22Feb2022
US Dollar Sales and Purchases by Reserve Bank of India (forex intervention) 05Aug2021
India's forex reserves - abysmal returns 13Mar2014
My Tweets (X Posts):
Tweet (Post X) thread 09Jun2024 - Forex Data Bank
Tweet 17Jun2024 - FPIs / FIIs were allowed to invest in India effective 14Sep1992
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References and additional data:
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Sources of information for this Forex Data Bank:
RBI data releases - details of weekly monthly, quarterly and annual data points released by RBI - for example, forex reserves including gold, currency in circulation (CIC), ECBs, RBI monthly bulletin, weekly supplement, balance of trade, household financial savings, International Investment Position (IIP), half-yearly report on forex reserves, RBI annual report, HBIE and others
RBI Annual Reports
NSDL FPI monitor - FPI flows CY
NSDL FPI monitor - FPI flows FY
NSDL FPI monitor - FPI AUC data / category-wise
NSDL FPI monitor - FPI AUC / top 10 countries data
-------------------
Read more:
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Big Surge in Number of Shareholders in PSUs
Why RBI Won't Favour A Strong Rupee
Currency Pairs: How to Calculate Depreciation or Appreciation
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RBI's Record Surplus Transfer to Govt of India
The Little Secret Behind Nifty Next 50 Index's Recent Success
Rapid Rise of India's PMS Industry
NSE Indices Calendar Year Returns: 2006 to 2024
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NSE Emerging Indices Comparison 31Mar2024
India Passive Funds and Their Asset Size 29Apr2024
Global Market Data 31Mar2024
Understanding Real Sensex and Currency Debasement
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Disclosure: I've got a vested interest in Indian stocks and other investments. It's safe to assume I've interest in the financial instruments / products discussed, if any.
Disclaimer: The analysis and opinion provided here are only for information purposes and should not be construed as investment advice. Investors should consult their own financial advisers before making any investments. The author is a CFA Charterholder with a vested interest in financial markets.
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