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.
- - -
--------------------------------------------------------------
RBI USD-INR Forex Swaps: Details of RBI USD-INR Buy/Sell and Sell/Buy swaps (old blog dated 22Feb2022 and old Tweet thread dated 22Feb2022)
Update 29Jan2025: Charts 58 to 59:
Reserve Bank of India on 27Jan2025 announced it would conduct a USD-INR buy/sell swap auction and the full details of which were announced on 28Jan2025. On 31Jan2025, RBI would conduct a buy/sell forex swap for USD 5 billion -- the stated purpose for the buy/sell swap is to inject liquidity into the banking system.
This is the not the first time a forex swap is conducted by RBI. It has been conducting them since Mar2019. And the current auction is seventh such one.
Central
banks the world over use forex swaps for a variety of reasons,
including liquidity management in their domestic markets.
India's
central bank, RBI, started using forex swaps as a liquidity management
tool, whereby it buys US dollar from banks giving rupee funds to banks
in exchange on the date when the swap was initiated. And on the maturity
date, RBI will sell US dollar to banks receiving rupee funds from banks
in return--thus completing the swap. For more details, see my earlier blog.
The following two charts provide details of difference between a buy/sell and sell/buy forex swap and the seven forex swaps conducted by RBI between 2019 and now.
--------------------------------------------------------------
FPI AUC data: FPI / FII AUC data: Assets under custody (AUC) data of foreign portfolio investors category-wise:
Update 16Jan2025: Charts 55 to 57:
(for old data > Old blog dated 10Jul2022 - Exit India Policy by Foreign Investors; and old blog dated 28Apr2022 - Foreigners' Shrinking Pie in Indian Equities)
FPI
equity assets, as on 31Dec2024, are Rs 71.18 lakh crore, showing an
annual growth of 16.1 per cent in rupee terms. While in dollar terms they
are at USD 831 billion, with a yearly growth of 12.8 per cent.
In
the same period, BSE market cap rose by 21.3 per cent to Rs 441.95 lakh
crore, with Nifty 50 growing by 8.8 per cent and BSE 200 by 13.4 per
cent. The BSE market cap growth is much higher compared to rise of BSE 200, as there have been a number of new listings (initial public offers or IPOs) and follow on public offers (FPOs) in 2024.
Equity AUC assets held by FPIs are just 16.1 per cent of total market cap of all BSE listed firms as of 31Dec2024.
FPI investors have been losing interest considerably in Indian stocks in the past four years -- their share has come down from almost 20 per cent in Mar2021 to 16 per cent in Dec2024; domestic investors' share has been rising gradually during the period.
The following charts provide data of equity AUC and debt AUC from Mar2017 till Dec2024.
During 2024, the growth in equity AUC held by FPIs is much lower (FPI inflows to equity market are practically nil) at 16.1 per cent (in rupee terms) compared to the growth of 35 per cent in debt AUC -- this is due to huge FPI inflows into debt segment in 2024 as India government bonds were included in JP Morgan and Bloomberg emerging market indices in Sep2023 and Mar2024 respectively.
--------------------------------------------------------------
FPI Flows to India : Foreign
Portfolio flows: 15-year data from 2010 to 2014 both calendar- and
financial-year wise: FPI flows in both equity and debt segments (old blog 10Jul2022) >
Update 14Jan2025: Charts 51 and 54:
The data include financial-year wise data, quarterly data and monthly data. The data are as per NSDL FPI monitor.
The data include Sensex and BSE 200 levels as at the end of the respective quarter / month -- which will be enable the readers to discern the impact of FPI outflows / inflows on the Indian stock market.
FPI
flows to India in the equity segment have been barely positive at Rs 427 crore in calendar year 2024; while debt flows are positive with Rs 1.65 lakh crore inflow in the same period.
The quarterly outflow of Rs 100,813 crore in Oct-Dec2024 is one of the highest FPI outflows in Indian stock market in recent years. Though domestic institutional investors (DIIs) and retail investors have remained as a counterweight to FPI outflows in the past eight years, the exodus of FPIs in the past three months has a negative bearing on Indian stocks.
As the FPI outflow of more than Rs 1 lakh crore in Oct-Dec2024 quarter is large in a short period of time, the Sensex lost 7.3 per cent of its value during the quarter.
Bond inclusion: One redeeming feature of FPI flows has been the positive inflow of Rs 1.65 lakh crore in the debt segment. After the announcement of JP Morgan including India government bonds in their EM indices in Sep2023 and the inclusion Indian government bonds in Bloomberg EM indices in Mar2024, FPI flows to Indian bond market have accelerated. Overall, this is a positive development for foreign portfolio flows to India.
--------------------------------------------------------------
MSCI EM Index - China and India weights: Quarterly changes between Sep2024 and Dec2024: (for old data, see old blogs dated 07Jan2023 and blog 03Aug2021)
Update 10Jan2025: Chart 50:
India's rank in the MSCI EM Index has slipped from second in Sep2024 to third rank in Dec2024. Taiwan regained second rank in Dec2024.
Taiwan's ranking has gone up due to rise in the stock price of semiconductor giant TSMC.
As
of Dec2024, India's weight is 19.43 per cent in third place; while
China maintains its first rank with 27.79 per cent weight. In the last three months, Saudi Arabia has gained fifth rank, for the first time, dethroning Brazil.
In Jul2024, India's weight
was above 20 per cent -- but as of Dec2024, its weight has slightly decreased;
as China's weight increased to 27.79 per cent from its recent low of
24.54 per cent (31Jul2024).
The chart below looks at the past five quarters data, with valuation ratios, top five countries and top five companies.
Four Indian companies are in the top 10 of the list.
For raw data, please check tweet 10Jan2025.
--------------------------------------------------------------
Global market data: Global market data pertaining to stocks, bonds,
commodities and currencies are presented here. The data points are yearly changes and compounded returns from 2013
to 2023, indicating how the values have moved over the years. (old blog dated 12Jan2024 - global market data 2013 to 2023).
Update 04Jan2025: Charts 47 to 49:
The
stock market data presented in the table are price returns (not
including dividends) and they are in local currency terms.
Three charts here:
> Yearly changes from 2014 to 2024
> Compounded annual returns for 3-year, 5-y, 7-y and 10-y periods as at the end of 31Dec2024
> divergence between the US and India 10-year bond yields in the past 12 years
You
can find out how the assets classes and currencies have moved over the
years. These charts reveal the cyclical nature of the returns in global
financial markets.
Over the past 12 calendar years, the movements of the US 10-year Treasury note yield and India’s 10-year G-Sec yield have shown significant divergence:
Simultaneous Increases: The yields for both countries rose together, albeit by differing amounts (in basis points), on four occasions: in 2013, 2018, 2021, and 2022.
Simultaneous Decreases: Similarly, both yields declined in tandem—though with different changes in basis points—on four occasions: in 2014, 2019, 2020, and 2023.
Divergent Movements: In four other years (2015, 2016, 2017, and 2024), the yield changes were divergent: when US yields rose, Indian yields fell, and vice versa.
This analysis suggests that the yields in the US and India do not always move in the same direction in any given year. The divergence is largely influenced by varying inflation differentials, interest rate policies, monetary strategies, and economic growth rates between the two countries, which often lead to distinct yield movements.
This analysis suggests that the yields in the US and India do not always move in the same direction in any given year. The divergence is largely influenced by varying inflation differentials, interest rate policies, monetary strategies, and economic growth rates between the two countries, which often lead to distinct yield movements.
--------------------------------------------------------------
Global market data: Global market data pertaining to stocks, bonds,
commodities and currencies are presented here (old blog dated 29Jun2024).
Update 01Jan2025: Charts 45 and 46:
Quarter-to-date
(QTD) global market data, as on 31st of December, 2025, of stocks, bonds,
currencies and commodities is as follows - also included is year-to-data
(YTD) between Dec2023 and Dec2024:
During Oct-Dec2024 quarter, Indian stocks have been weak due to a variety of concerns (high valuation, weak consumption, FPI selling, regulation and others), while the Japanese, German and US stocks held well.
There is a big jump in US yields though the US Fed cut rates by 100 basis points. But Indian yields have remained the same during the quarter.
Bitcoin is the biggest gainer in the quarter (especially after Trump's victory in US presidential polls) with 47% rise. Silver is weak with 7% fall while gold held steady. Crude oil prices have increased by around 5%.
The US dollar index has recorded one of its biggest quarterly gains with 7.6% rise, with JPY, EUR and GBP losing heavily. Even the Chinese yuan is weak against the dollar.
In calendar year 2024, the biggest gainer is Bitcoin with a gain of more than 120%. Indian stocks are relatively subdued compared to US (led by Magnificent 7 and other tech stocks), German, Hong Kong and Japanese stocks. Mid- and small-cap stocks have done well for Indians. The US yields are up, while Indian bond yields are down.
YTD, gold and silver have given decent returns, while oil prices remained subdued. The DXY (US dollar index) rose by 7% as Japanese yen and GBP remained weak throughout the year.
(please click on the images to view better)
--------------------------------------------------------------
US Federal Funds Rate Cycles Since 1999 to Now : (old blog dated 25Feb2023):
Update 28Dec2024: Charts 42 to 44:
These three charts show the following:
> US Federal Funds Rate Cycles Since 1999 to Now
> US Fed's Four Interest Rate Hike Cycles Since 1999
> US Fed's Quantitative Easing (QE) and Tightening (QT)
The current downward interest rate cycle in the US started in Sep2024 and is continuing now; and it's expected to continue at least till the middle of 2025, subject to incoming data. In the current down cycle, the US Fed has decreased the Fed funds rate by 100 basis points so far.
There have be four interest rate hike cycles since 1999 till now.
The quantitative tightening cycle started in Apr2022 and is continuing now. During the period, the US Fed's balance sheet size decreased from USD 8,965 billion to USD 6,886 billion, a decrease of more than USD 2,000 billion or 23 per cent decline.
However, from the start of QE in Sep2008, the US Fed's balance sheet has grown from USD 905 billion to USD 6,886 billion now -- an increase of 660 per cent in 16 years.
Data: St Louis Fed Economic Data on Fed Balance Sheet size
--------------------------------------------------------------
US Dollar Sale and Purchase by Reserve Bank of India: (old blog dated 05Aug2021 with monthly and yearly data for several years)
Update 19Dec2024: Chart 41:
Between Mar2024 and Sep2024, RBI has alternated between selling US dollars in one month and purchasing them in the next, as part of its intervention in the foreign exchange market.
Net purchase of USD by RBI in FY 2024-25 amounts to USD 8.55 billion.
USD sales and purchase by RBI > data from Sep2022 to Sep2024 >
--------------------------------------------------------------
US Federal Reserve Funds Rate: The US Federal Open Market Committee (FOMC) at its meeting on 18Dec2024 reduced federal funds rate by 25 basis points to a range
of 4.25-4.50 per cent.
Update 19Dec2024: Charts 39 and 40:
The
rate increase cycle began in Mar2022 and the last hike was in Jul2023.
We can say the immediate past rate hike cycle lasted from Mar2022 till
Sep2024 -- a period of two years and a half.
Calendar-year wise Fed Funds rate changes from 2003 to 2024 >
In calendar year 2024, the US Fed decreased the Fed funds rate by 100 basis points; whereas in 2023 and 2022, it was increased by 100 and 425 basis points respectively.
Interestingly, the current Fed funds rate is the same as it was at the end of 2022.
--------------------------------------------------------------
FPI flows to India: Foreign Portfolio Investments (equity only): Monthly data of FPI equity flows till Oct2024: FPI equity assets as at end-Feb2020 were Rs 28.87 lakh crore or USD 399.63 billion (USD INR 72.24 as 28Feb2020).
FPI equity outflows in Mar2020 were Rs 61,973 crore or USD 8.2 billion (USD INR 75.60 as on 31Mar2020).
So, FPI equity outflows in Mar2020 were 2.15 per cent of total FPI equity assets (FPI AUC) as at the end of Feb.2020.
FPI equity assets as at end-Sep2024 are Rs 77.87 lakh crore or USD 929.35 billion (USD INR 83.79 as 30Sep2024).
FPI equity outflows in Oct2024 are Rs 94,017 crore (FPI NSDL data) or USD 11.18 billion.
So, FPI equity outflows in Oct2024 are just 1.21 per cent of total FPI equity assets (FPI AUC) as at the end of Sep2024.
Update 10Nov2024: Chart 38:
Year to date (till Oct2024), FPI flows into Indian equity markets have been positive at Rs 6,593 crore.
But the month of Oct2024 has witnessed one of the heaviest selling by FPIs or foreign portfolio investors -- in this month, they sold Indian stocks worth Rs 94,000 crore. The relentless selling by FPIs continues in November 2024 (till 8th) also, with FPI selling amounting to Rs 20,000 crore.
Since the current bull market in Indian equity market since Apr2023, FPIs inflows into Indian stocks are Rs 2.04 lakh crore.
Comparison between Mar2020 (COVID-19 Pandemic Outbreak) and Oct2024:
FPI equity outflows in Mar2020 were Rs 61,973 crore or USD 8.2 billion (USD INR 75.60 as on 31Mar2020).
So, FPI equity outflows in Mar2020 were 2.15 per cent of total FPI equity assets (FPI AUC) as at the end of Feb.2020.
FPI equity assets as at end-Sep2024 are Rs 77.87 lakh crore or USD 929.35 billion (USD INR 83.79 as 30Sep2024).
FPI equity outflows in Oct2024 are Rs 94,017 crore (FPI NSDL data) or USD 11.18 billion.
So, FPI equity outflows in Oct2024 are just 1.21 per cent of total FPI equity assets (FPI AUC) as at the end of Sep2024.
Due to huge selling of Indian stocks by FPIs in Oct2024, their FPI equity assets as on 31Oct2024 decreased to Rs 71.08 lakh crore (or USD 845.41 billion at USD-INR of 84.08), a fall of 8.72 per cent in the month of Oct2024 alone.
--------------------------------------------------------------
US Federal Reserve Funds Rate: The US Federal Open Market Committee (FOMC) at its meeting
on 07Nov2024 reduced federal funds rate by 25 basis points to a range
of 4.50-4.75 per cent. This is a follow-up of the 50 basis points cut done by the Fed on 18Sep2024.
Update 10Nov2024: Chart 37:
--------------------------------------------------------------
Update 29Oct2024: Charts 34 to 36:
The amount of gold holding (in US dollar terms) as a percentage of total forex reserves of India is 9.3 per cent as of Sep2024; this is the highest percentage of gold holdings in the past 15 years.
The previous high was 9.2 per cent as of Mar.2012.
The value of RBI's gold holdings is USD 65.7 billion out of the total forex reserves of USD 705.8 billion as of Sep2024.
India gold reserves - physical gold as on 30Sep2024:
Of the 854.7 metric tonnes of RBI gold reserves as of Sep2024, 510.5 metric tonnes is held in Indian vaults, 324 metric tonnes is held abroad (in the safe custody of Bank of England and BIS or the Bank for International Settlements), and 20.3 metric tonnes is held as gold deposits.
India gold reserves - physical gold as on 30Sep2024:
As the below chart shows, gold reserves held in India increased from 408.3 metric tonnes in Mar2024 to 510.5 metric tonnes in Sep2024.
The increase of 102.2 metric tonnes held in India is due to a combination of new gold bought in the period and gold brought to India from the physical vaults of Bank of England and the Bank for International Settlements (BIS).
After the Russian invasion of Ukraine in Feb.2022 and subsequent economic sanctions on Russia and the illegal impounding of Russia's forex reserves by the West, Government of India and Reserve Bank of India seemed to have taken a conscious decision to bring back physical gold reserves held abroad (with BoE and BIS) to Indian vaults.
As such, we are seeing increase in physical gold held domestically by RBI.
Total percentage of gold held by RBI domestically is now at 59.7 per cent of the total gold reserves -- this is the highest percentage in the past 15 years. As of Mar.2010, 52.4 per cent of the gold was held domestically.
Between Mar2024 and Sep2024, RBI brought an amount of 69.5 metric tonnes to Indian vaults from gold held abroad with BoE and BIS.
Between Mar2022 and Sep2024, a total amount of 120.3 metric tonnes is brought from abroad to India by RBI, as the below data show.
--------------------------------------------------------------
MSCI EM Index - China and India weights: (for old data, see old blogs dated 07Jan2023 and blog 03Aug2021)
Update 19Oct2024: Charts 30 to 33:
India's rank in the MSCI EM Index has risen in recent years, a manifestation of India's importance in the global world.
As of Sep2024, India's weight is 19.52 per cent with second place; while China maintains its first rank with 27.81 per cent weight. In the last one month, the gap between China and India weightings has widened due to sharp uptick in Chinese stocks last month. Taiwan closely follows India.
In Jul2024, India's weight was above 20 per cent -- but as of Sep2024, its weight has decreased; as China's weight increased to 27.81 per cent from its recent low of 24.54 per cent (31Jul2024).
The chart below looks at the past five quarters data, with valuation ratios, top five countries and top five companies.
As of Sep2024, top five companies in the index are TSMC, Tencent, Samsung, Alibaba and Meituan. Reliance Industries, HDFC Bank, ICICI Bank and Infosys are among the top ten from India stable.
Significantly, HDFC Bank regained its position among the top ten.
--------------------------------------------------------------
FPI flows to India: Foreign Portfolio Investments (equity only): Monthly and quarterly data of FPI flows till Sep2024: 
Update 18Oct2024: Charts 28 and 29:
Year to date (till Sep2024), FPI flows into Indian equity markets have been positive at Rs 100,605 crore.
Since the current bull market in Indian equity market since Apr2023, FPIs inflows into Indian stocks are Rs 2.98 lakh crore.
However, in Oct2024 (till today), FPI equity outflows are Rs 77,701 crore as per NSDL FPI data.
Comparison between Mar2020 (COVID-19 Pandemic Outbreak) and Oct2024:
FPI equity assets as at end-Feb2020 were Rs 28.87 lakh crore or USD 399.63 billion (USD INR 72.24 as 28Feb2020).
FPI equity outflows in Mar2020 were Rs 61,973 crore or USD 8.2 billion (USD INR 75.60 as on 31Mar2020).
So, FPI equity outflows in Mar2020 were 2.15 per cent of total FPI equity assets (AUC) as at the end of Feb.2020.
FPI equity assets as at end-Sep2024 are Rs 77.87 lakh crore or USD 929.35 billion (USD INR 83.79 as 30Sep2024).
FPI equity outflows in Oct2024 (till today) are Rs 77,701 crore (FPI NSDL data) or USD 9.24 billion.
So, FPI equity outflows in Oct2024 (till today) are just 1 per cent of total FPI equity assets (AUC) as at the end of Sep2024.
FPI equity outflows in Mar2020 were Rs 61,973 crore or USD 8.2 billion (USD INR 75.60 as on 31Mar2020).
So, FPI equity outflows in Mar2020 were 2.15 per cent of total FPI equity assets (AUC) as at the end of Feb.2020.
FPI equity assets as at end-Sep2024 are Rs 77.87 lakh crore or USD 929.35 billion (USD INR 83.79 as 30Sep2024).
FPI equity outflows in Oct2024 (till today) are Rs 77,701 crore (FPI NSDL data) or USD 9.24 billion.
So, FPI equity outflows in Oct2024 (till today) are just 1 per cent of total FPI equity assets (AUC) as at the end of Sep2024.
Quarterly data: Since Jan2020, FPI equity inflows into Indian equity markets are Rs 3.46 lakh crore.
During Jul-Sep2024 quarterly, FPI inflows are Rs 97,405 crore, which is the highest in a quarter since Apr-Jun2023 quarter.
--------------------------------------------------------------
FPI AUC data: FPI / FII AUC data: Assets under custody (AUC) data of foreign portfolio investors category-wise:
Update 01Oct2024: Charts 25 to 27:
(for old data > Old blog dated 10Jul2022 - Exit India Policy by Foreign Investors; and old blog dated 28Apr2022 - Foreigners' Shrinking Pie in Indian Equities)
FPI equity assets, as on 30Sep2024, are Rs 77.87 lakh crore, showing an annual growth of 44 per cent in rupee terms. While in dollar terms they are at USD 930 billion, with a yearly growth of 42.6 per cent.
In the same period, BSE market cap rose by 48.7 per cent to Rs 474.35 lakh crore, with Nifty 50 growing by 31.4 per cent and BSE 200 by 38.5 per cent.
Equity AUC assets held by FPIs are just 16.4 per cent of total market cap of all BSE listed firms as of 30Sep2024.
Total assets (including equity and debt) in India held by FPIs have surpassed USD 1 trillion for the first time.
Between Mar2017 and Sep2024, equity assets held by FPIs have decreased from 19.5 per cent to 16.4 per cent of the total market capitalisation of all BSE listed firms. BSE Limited is one of the top two stock exchanges in India.
Chart given below shows yearly data from Mar2017, including USD INR exchange rate for comparison / contextual purposes.
Between Mar2017 and Sep2024, debt assets held by FPIs have increased from Rs 3.35 lakh crore to Rs 6.32 lakh crore.
Debt AUC data include data of debt VRR, debt FAR and hybrid; but does not include data of mutual funds and AIFs (alternative investment funds).
--------------------------------------------------------------
Global market data: Global market data pertaining to stocks, bonds,
commodities and currencies are presented here (old blog dated 29Jun2024).
Update 01Oct2024: Charts 23 and 24:
Quarter-to-date (QTD) global market data, as on 30 September 2024, of stocks, bonds, currencies and commodities is as follows - also included is year-to-data (YTD) between Dec2023 and Sep2024:
QTD: Among major stock indices, Hang Seng and Shanghai Composite indices have done well with China providing a fiscal and monetary stimulus in the last one week; while Nikkei 225 provided negative returns negatively impacted by steep rise in yen versus the dollar.
The US 10-year Treasury yield is down a staggering 62 basis points during the quarter based on expectations of Fed funds rate cut. Due to Fed rate cut expectations and actual cut by the Fed, US dollar index is down by 4.8 per cent; with JPY and EUR rising strongly against the dollar. Gold too has done well with achieving record-breaking highs during the quarter.
YTD: Hang Seng and S&P 500 have done well year to date. The US 10-year Treasury note yield is down by a mere 10 basis points. Gold and silver have been the biggest surprise winners of the year. Bitcoin has gained a massive 50 per cent during the year so far.
The US dollar index barely moved, though GBP gained 5.5 per cent against the dollar.
--------------------------------------------------------------
US Federal Reserve Funds Rate: The US Federal Open Market Committee (FOMC) at its meeting on 18Sep2024 reduced federal funds rate by 50 basis points to a range of 4.75-5.00 per cent. This is the first rate cut since Mar2020.
Update 19Sep2024: Chart 22:
The rate increase cycle began in Mar2022 and the last hike was in Jul2023. We can say the immediate past rate hike cycle lasted from Mar2022 till Sep2024 -- a period of two years and a half.
Fed Funds rate from Mar2020 till now (for old data, see here)
--------------------------------------------------------------
FPI flows to India: Foreign Portfolio Investments (equity only): Monthly data of FPI flows till Jun2024 quarter and Aug2024 month:
Update 05Sep2024: Chart 21:
Year to date, FPI flows into Indian equity markets have been positive at Rs 42,900 crore.
--------------------------------------------------------------
FPI flows to India: Foreign Portfolio Investments (equity only): Quarterly and monthly data of FPI flows till Jun2024 quarter and Jul2024 month:
Update 02Aug2024: Charts 19 and 20:
In the first seven months of 2024, FPI equity flows to India have been positive in four months and negative in three months -- with total FPI inflows from Jan2024 to Jul2024 amounting to Rs 35,600 crore.
In the past eight quarters (Jul2022-Jun2024), FPI equity flows have been positive in six quarters and negative in two quarters -- with total FPI inflows for those eight quarters amounting to Rs 2.70 lakh crore.
These monthly and quarterly charts will help you understand whether FPI equity inflows or outflows in a month have any relationship with the ups and downs of Indian equity markets.
A cursory glance at the data indicates the influence of FPIs has been slim to none on Indian stocks -- the markets are now dominated by inflows from domestic institutional investors (DIIs), high net worth individuals (HNIs) and retail investors.
(see Charts 10 and 11 added on 12Jun2024 for financial year-wise and calendar year-wise data)
--------------------------------------------------------------
US Federal Reserve Funds Rate: The US Federal Open Market Committee (FOMC) at its meeting on 31Jul2024 decided to keep its federal funds rate unchanged at 5.25-5.50 per cent range (old blog dated 25Feb2023).
Update 01Aug2024: Chart 18:
The US stock and bond markets reacted positively to the FOMC statement and post-policy press conference by Fed chair Jerome Powell. The comments are seen as dovish by the market.
The S&P 500 closed at 5,520, up 1.6 per cent yesterday while Nasdaq Composite was at 17,600, up 2.6 per cent.
The US 10-year Treasury yield closed at 4.06 per cent, while the 2-year closed at 4.29 per cent, both closed lower reacting positively to the FOMC / post-policy press conference.
Fed Funds rate from Mar2020 till now (for old data, see here)
--------------------------------------------------------------
India's crude oil dependency: (blog dated 25Sep2023 with updates) India's
crude oil import dependency was 87.4 per cent during FY 2023-24, as per
latest data from PPAC, a Gov't of India body.
Update 21Jul2024: Chart 17:
The ratio was much higher
compared to 77.6 per cent during FY 2013-14. Energy security is a neglected baby in India.
--------------------------------------------------------------
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 >
--------------------------------------------------------------
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 >
--------------------------------------------------------------
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."
--------------------------------------------------------------
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."
--------------------------------------------------------------
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
--------------------------------------------------------------
Update 15Jun2024: Charts 12 to 13:
--------------------------------------------------------------
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.
--------------------------------------------------------------
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):
--------------------------------------------------------------
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.
--------------------------------------------------------------
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:
--------------------------------------------------------------
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.
--------------------------------------------------------------
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
-------------------
References and additional data:
-------------------
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:
Blog of Blogs Theme-wise
Big Surge in Number of Shareholders in PSUs
Why RBI Won't Favour A Strong Rupee
Currency Pairs: How to Calculate Depreciation or Appreciation
Sensex versus Gold Price
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
How to Buy Nifty Midcap Index 03May2024
NSE Emerging Indices Comparison 31Mar2024
India Passive Funds and Their Asset Size 29Apr2024
Global Market Data 31Mar2024
Understanding Real Sensex and Currency Debasement
Select Gilt Funds Performance
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.
CFA Charter credentials - CFA Member Profile
CFA Badge
Viewing Options for this blog in different formats:
He blogs at:
https://ramakrishnavadlamudi.blogspot.com/
X (Twitter) @vrk100
No comments:
Post a Comment