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Sources of Variation in India’s Foreign Exchange Reserves during April-June 2026

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Today, the Reserve Bank of India released the balance of payments (BoP) data for the first quarter (Q1), i.e., April-June of 2026 on its website (www.rbi.org.in). On the basis of these data, the sources of variation in foreign exchange reserves during April-June 2026 are detailed below in Table 1.

Table 1: Sources of Variation in Foreign Exchange Reserves*
(US$ billion)
Items April-June 2025 April-June 2026
I.   Current Account Balance -3.4 -4.2
II.   Capital Account (net) (a to f) 7.9 -3.9
  a. Foreign Investment (i+ii) 6.9 -3.5
    (i) Foreign Direct Investment (FDI) 5.2 6.1
    (ii) Portfolio Investment 1.6 -9.6
  b. Banking Capital -1.6 2.8
    of which: NRI Deposits 3.6 2.8
  c. Short-term Credit -0.1 3.5
  d. External Assistance 0.7 0.4
  e. External Commercial Borrowings 5.5 1.0
  f. Other Items in Capital Account -3.5 -8.1
III.   Valuation Change 25.3 -14.4
IV.   Total (I+II+III) @
Increase in reserves (+) / Decrease in reserves (-)		 29.8 -22.5
*: 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/imports, 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 decreased by US$ 8.1 billion during April-June 2026 as against an accretion of US$ 4.5 billion during April-June 2025. Foreign exchange reserves in nominal terms (i.e., including valuation effects) decreased by US$ 22.5 billion during April-June 2026 as against an accretion of US$ 29.8 billion in April-June 2025 (Table 2).

Table 2: Comparative Position of Variation in Reserves
(US$ billion)
Items April-June 2025 April-June 2026
1. Change in Foreign Exchange Reserves (i.e., Including Valuation Effects) 29.8 -22.5
2. Valuation Effects [Gain (+)/Loss (-)] 25.3 -14.4
3. Change in Foreign Exchange Reserves on BoP basis (i.e., Excluding Valuation Effects) 4.5 -8.1
Note: Increase in reserves (+)/Decrease in reserves (-).
Difference, if any, is due to rounding off.

The valuation loss, primarily reflecting lower price of gold and appreciation of US dollar against major currencies, amounted to US$ 14.4 billion during April-June 2026 as against a valuation gain of US$ 25.3 billion during April-June 2025.

(Brij Raj)           
Chief General Manager

Press Release: 2026-2027/1016



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