India Foreign Exchange Reserves Data - vrk100 - 18May2022

India Foreign Exchange Reserves Data - vrk100 - 18May2022

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(Effective May2024, all the forex data are updated in new blog Forex Data Bank) 

 

(Updates 22May2024 and 05Nov2023 are available with new data at the end of the article) 

 

(various links related to forex / FDI/ FPI are available at the end of the article)

In the past 20 years, India's foreign exchange reserves have gone up by more than USD 560 billion. The following table shows data, from 2000 till 2022, relating to foreign exchange reserves position as at the end of a financial year (India's fiscal year runs from April to March every year), foreign exchange reserves accretion and net sale and purchase of US dollars by Reserve Bank of India, India's central bank.

Table: Foreign Exchange Reserves, Accretion and USD sales and purchases: 

 

 

At the turn of the century, India's forex reserves were around USD 42 billliion. Now, they have grown to USD 618 billion as at the end of March 2022. In the past two months, forex reserves have come down to USD 596 billion due to sale of US dollars by Reserve Bank of India as part of its intervention in the forex markets to stabilise USD - INR exchange rate.

Abbreviations used:

USD  - United States dollar 

USD - INR - US dollar and Indian rupee exchange rate  

If you want to know more about foreign exchange reserves, dollar flows in to India and India's macro economic data, you can check the following blogs:

I update regularly the data furnished in some of the following blogs:

Exit India Policy by Foreign Investors

Slowing Foreign Direct Investment to India

India Foreign Exchange Reserves Data

US Dollar Sales and Purchases by Reserve Bank of India 

India forex reserves in four charts

FPI flows in to Indian stock market

Foreigners' shrinking pie in Indian stock market

Foreign investors' waning interest in Indian stocks 

When Will Foreign Investors Stop Selling Indian Stocks?

India macro data

RBI Gold holdings

RBI announces USD INR Buy Sell Swaps

India's forex reserves - abysmal returns

 

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P.S.: After writing the blog, the following updates are added with new information / images:

Update 22May2024: 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 05Nov2023: Table showing India's foreign exchange reserves data from FY 2009-10 till FY 2022-23. 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 >

 

USD-INR level at the end of each financial year is added so that one can compare how the Indian rupee's movement (mostly depreciation vs USD -- except during RBI governor Subba Rao's years, FY 2009-10 and 2010-11) versus US dollar affects USD sale and purchase by RBI and accretion / depletion of forex reserves >

 

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References:

Tweet thread 17Jan2021

Tweet 20May2021

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-------------------

Disclosure:  I've vested interested 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

 

He blogs at:

https://ramakrishnavadlamudi.blogspot.com/

https://www.scribd.com/vrk100

Twitter @vrk100

US Dollar Sales and Purchases by Reserve Bank of India - vrk100 - 05Aug2021

US Dollar Sales and Purchases by Reserve Bank of India 

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(Updated charts from Dec2024 onwards are available in India Forex Data Bank blog)  

 

(note: Updates with latest information chart as of Mar2024, Jan2024, Sep2023, Jul2023, May2023, Jan2023, Sep2022, Aug2022 and May2022 are available at the end of this blog) 

 

One of the major factors affecting US dollar - Indian  rupee (USD-INR) exchange rate is the market intervention by India's central bank Reserve Bank of India in the foreign exchange (forex) market through sales and purchases of US dollar. The official RBI line is that it intervenes in forex market with a view to curtailing volatility in the exchange rate.

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Read more: Fed Tapering is Postponed

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RBI releases the monthly aggregate data of USD sales and purchases with a lag of two months. For example, the data for the month of July 2021 will be released in September 2021 as part of RBI's monthly bulletin.

As of today, the data till May 2021 are available. After selling US dollars to the tune of USD 6.92 billion in February and March this year, RBI again started buying USD in April and May this year. During May 2021, RBI net intervention in the forex market is to the tune of USD 5.84 billion.

The monthly data from January 2019 to May 2021 are given below (please click on the image for a better view):

 

References:

My tweet thread dated 17Jun2021 

 

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P.S.: After writing the blog, the following updates are added with new information / images:

 

Update 22May2024:  , RBI net India Forex Reserves data from FY 2008-09 to FY 2023-24 including data of Fx reserves accretion / depletion, net sale / purchase of US dollars by RBI and USD INR exchange rate.

 

 

 

Update 22May2024:   In FY 2023-24, RBI net bought US dollars worth USD 41.3 billion, against net sales of USD 25.5 billion in FY 2022-23. After selling dollars net for four months consecutively between Aug and Nov2023, RBI was buying net dollars in the past four months consecutively.

 

 

 

Update 20Mar2024:   In the first 10 months of FY 2023-24, RBI net bought US dollars worth USD 19.5 billion. After selling dollars net for four months consecutively between Aug and Nov2023, RBI was buying net dollars in Dec2023 and Jan2024.

 

Update 16Nov2023:   In the first half of FY 2023-24, RBI net bought US dollars worth USD 17.687 billion. Interestingly, for two consecutive months in Aug2023 and Sep2023, RBI was selling US dollars -- obviously to stem the fall of rupee vs dollar.

 

 

 

 

Update 21Sep2023:   In FY 2022-23, RBI net sold US dollars worth USD 25.52 billion to prop up a depreciating Indian rupee versus the US dollar. However, from Apr to Jul2023, RBI net bought US dollars worth 23.05 billion.

 

 

Update 27Jul2023:   In FY 2022-23, RBI net sold US dollars worth USD 25.52 billion to prop up a depreciating Indian rupee versus the US dollar. However, in April and May, RBI net bought US dollars worth 15.08 billion.

 

Update 21Mar2023:   In FY 2022-23 (10 months data till Jan2023), RBI net sold US dollars worth USD 26.52 billion to prop up a depreciating Indian rupee versus the US dollar.

 

 

 

 

Update 18Nov2022:   In the past five months (Jun2022 to Sep2022), RBI sold dollars worth USD 37.38 billion, with a view to defending the depreciating Indian rupee versus the rising US dollar > mainly as a result of the rupee defense by RBI in the past one year or so, India's forex reserves are down by more than USD 100 billion to USD 544.72 billion as on 11Nov2022 > 

 

 Update 17Oct2022:   After one of the highest USD sales in a single month of USD 19 billion in Jul2022, the USD sales by RBI are dramatically down to USD 4.3 billon in Aug2022 >

 

Update 19Jul2022:   After highest net sale of US dollars by RBI in a single month in Mar2022 in more than a decade, RBI bought USD to the tune of about USD 4 billion in April and May of 2022 > 

 

 Update 18May2022:   Highest net sale of US dollars by RBI in a single month since Oct2008 (after Lehman Brothers collapse) -- in Mar2022, RBI net sold USD 20.1 billion versus net sales of USD 18.7 billion in Oct2008 -- of course, 2022 economy is bigger compared to 2008 economy -

 

 

 Update 23Feb2022:   

 

Update 17Dec2021:

 

Update 29Nov2021: 

Update 25Sep2021:

 

Update 22Aug2021: During the month of June 2021, RBI's net purchases of US dollars are to the tune of USD 18.63 billion, this is the highest figure in the history of RBI. (Of course, Indian economy has grown hugely--to that extent the absolute numbers look higher and higher always).

 

 

Disclosure:  I've vested interested in Indian stocks and other investments. It's safe to assume I've interest in the financial 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

 

He blogs at:

https://ramakrishnavadlamudi.blogspot.com/

https://www.scribd.com/vrk100

Twitter @vrk100     

 

 

RBI Intervention in Forex Markets-VRK100-20Apr2014

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RBI Net Intervention In Forex Markets

Reserve Bank of India intervenes in the foreign exchange markets with the explicit view of controlling what it calls ‘excess volatility’ of the Indian rupee’s exchange rate. As can be seen from the above table, RBI intervened heavily in the market between June 2013 and January 2014. During the financial year 2013-14 (data is available only up to February 2014), it bought $18 billion and sold $16.80 billion, with net purchases amounting to about $1.2 billion.

RBI’s Intervention: The action in FY 2013-14 is divided into three periods:

Period	Sale/Purchase (net)	Remarks (in hindsight)	USD-INR
Jan.2014-Feb.2014	Sold $2.4 billion	Since Jan.14, INR continued to gain vs USD though in a limited way.	17.04.14: 60.29 31.03.14: 59.95 31.12.13: 61.80
Oct.2013-Dec.2013	Bought $17.50 billion	INR started gaining from an historic low of 68.80 (on 28.08.13) & ended at 62.58 by 30.9.13. It further gained to end at 61.80 on 31.12.13. In order to arrest steep gain of INR, RBI bought USD. ^	31.12.13: 61.80 30.09.13: 62.58
Jun.2013-Sep.2013	Sold $14.24 billion	During the 1st week of May 2013, INR was hovering around 54. US Fed hinted at Fed tapering on 22.05.13. From 54 in the middle of May.13, INR fell heavily to 68.80 by 28.08.13. RBI sold US dollar to prevent INR falling heavily against USD.	30.09.13: 62.58 28.08.13: 68.80 31.07.13: 60.86 30.06.13: 59.39 31.05.13: 56.58 22.05.13: 55.66 30.04.13: 53.69 31.03.13: 54.29

^ RBI in September 2013 created two swap windows for FCNR(B) funds and Banks' Overseas Borrowings. Through them, it collected USD 34 billion till 30 November 2013—part of this foreign exchange was added to India’s foreign exchange reserves.

Movement of Forex Reserves in FY 2013-14:

Accretion or depletion of India’s forex reserves depends on rupee exchange rate, capital inflows to India and RBI’s net intervention in the markets. India’s latest foreign exchange reserves, as on 11 April 2014, stood at $309.44 billion (out of which gold accounts for $21.57 billion).

From a level of $292.65 billion at end-March 2013, forex reserves came down by $17 billion to $275.50 billion by the end of August 2013—as rupee fell sharply against the dollar and RBI was selling dollars to prop up rupee (see above table).

As rupee started appreciating since the end of August 2013, RBI started adding reserves. Between September 2013 and December 2013, reserves rose by $20 billion to close at $295.71 billion (end-Dec.2013). At the end of March 2014, India’s reserves stood at $303.67 billion, with further addition of $8 billion.

To Sum Up:

Compared to the period of May.2013-Dec.2013, Indian rupee’s volatility has come down to a great extent providing some cheer to the financial markets. The drastic reduction, engineered by the Indian government, of current account deficit in FY 2013-14 has also contributed to the rupee appreciation and to the relative stability of the exchange rate.

India’s national elections are underway right now and the future movement of exchange rate will much depend on the structural policies that the next government will bring to the Indian economy.

My Recent Tweets:

As RBI buys US dollars to shore up India's forex reserves, it releases rupees into the banking system. Won't this lead to higher inflation?
— RamaKrishnaVadlamudi (@vrk100) April 20, 2014

Net buying of US dollars by RBI b/w Oct.13 and Feb.14 amounts to $15 billion, as per new data. B/w Jun.13 & Sep.13, it sold $14.2 billion.
— RamaKrishnaVadlamudi (@vrk100) April 20, 2014

As INR was falling sharply vs USD b/w Jun.13 & Aug.13, RBI sold USD to prop up INR. Later, RBI was buying USD to prevent INR's sharp gain.
— RamaKrishnaVadlamudi (@vrk100) April 20, 2014

During times of rupee's volatility, RBI intervenes routinely either to prop up INR or prevent INR's sharp appreciation vs major currencies.
— RamaKrishnaVadlamudi (@vrk100) April 20, 2014

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Related Articles:

India’s Forex Reserves-Abysmal Returns

Fed Tapering is Postponed

Spectacular Rise of Indian Rupee

Limited Direct RBI Intervention

Disclaimer: The author is an investment analyst with a vested interest in the Indian stock markets. This is for information purposes only. This should not be construed as investment advice. Investors should consult their own financial advisers before taking any investment decisions. The author blogs at:

http://ramakrishnavadlamudi.blogspot.in/   http://www.scribd.com/vrk100

Tweets at @vrk100