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Date : Jun 24, 2024
Sources of Variation in India’s Foreign Exchange Reserves during April-March 2023-24

Today, the Reserve Bank of India released balance of payments (BoP) data for the fourth quarter (Q4), i.e., January-March 2023-24 on its website ( On the basis of these data, the sources of variation in foreign exchange reserves during 2023-24 are detailed below in Table 1.

Table 1: Sources of Variation in Foreign Exchange Reserves*
(US$ billion)
Items 2022-23 2023-24
I.   Current Account Balance -67.1 -23.3
II.   Capital Account (net) (a to f) 57.9 87.0
  a. Foreign Investment (i+ii) 22.8 53.9
    (i) Foreign Direct Investment (FDI) 28.0 9.8
    (ii) Portfolio Investment -5.2 44.1
        of which:    
          Foreign Institutional Investment (FII) -4.8 44.6
          ADR/GDR 0 0
  b. Banking Capital 21.0 40.5
        of which: NRI Deposits 9.0 14.7
  c. Short-term Credit 6.5 -5.9
  d. External Assistance 5.5 7.5
  e. External Commercial Borrowings -3.8 0.1
  f. Other Items in Capital Account 5.8 -9.1
III.   Valuation Change -19.7 4.3
    Total (I+II+III) @
Increase in reserves(+) / Decrease in reserves (-)
-28.9 68.0
*: Based on the old format of BoP which may differ from the new format (BPM6) in the treatment of transfers under the current account and ADRs/ GDRs under portfolio investment.
@: Difference, if any, is due to rounding off.
Note: ‘Other Items in Capital Account’ apart from ‘Errors and Omissions’ includes SDR allocation, leads and lags in exports, funds held abroad, advances received pending issue of shares under FDI, 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$ 63.7 billion during 2023-24 as against a depletion of US$ 9.1 billion during 2022-23. Foreign exchange reserves in nominal terms (including valuation effects) increased by US$ 68.0 billion during 2023-24 as against a decrease of US$ 28.9 billion in the preceding year (Table 2).

Table 2: Comparative Position of Variation in Reserves
(US$ billion)
Items 2022-23 2023-24
1 Change in Foreign Exchange Reserves (Including Valuation Effects) -28.9 68.0
2 Valuation Effects [Gain (+)/Loss (-)] -19.7 4.3
3 Change in Foreign Exchange Reserves on BoP basis (i.e., Excluding Valuation Effects) -9.1 63.7
Note: Increase in reserves (+)/Decrease in reserves (-).
Difference, if any, is due to rounding off.

The valuation gain, primarily reflecting the rise in gold price, amounted to US$ 4.3 billion during 2023-24 as against a valuation loss of US$ 19.7 billion during 2022-23.

(Puneet Pancholy)  
Chief General Manager

Press Release: 2024-2025/551