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Sources of Variation in Foreign Exchange Reserves in India during April-June 2018
September, 10th 2018

Earlier today, the Reserve Bank of India released balance of payments (BoP) data for April-June 2018 on its website ( On the basis of these data, the sources of variation in foreign exchange reserves during April-June 2018 have been compiled.

Sources of Variation in Foreign Exchange Reserves: April-June 2018

During April-June 2018, there was a decrease in the foreign exchange reserves. The sources of variation in the foreign exchange reserves are set out in Table 1.

Table 1: Sources of Variation in Foreign Exchange Reserves*
(US$ billion)
Items 2018-19 2017-18
April-June April-June
I.   Current Account Balance -15.8 -15.0
II.   Capital Account (net) (a to f) 4.5 26.4
  a. Foreign Investment (i+ii) 1.6 19.6
    (i) Foreign Direct Investment (FDI) 9.7 7.1
    (ii) Portfolio Investment -8.1 12.5
           Of which:    
           Foreign Institutional Investment (FII) -9.1 11.9
  b. Banking Capital 10.1 6.8
           Of which: NRI Deposits 3.5 1.2
  c. Short term credit -3.5 0.6
  d. External Assistance 0.5 0.7
  e. External Commercial Borrowings -0.7 -0.3
  f. Other items in capital account -3.5 -0.9
III.   Valuation change -7.5 5.2
    Total (I+II+III) @
Increase in reserves (+) / Decrease in reserves (-)
-18.8 16.6
*: Based on 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’ include 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), the foreign exchange reserves decreased by US$ 11.3 billion during April-June 2018 as against an increase of US$ 11.4 billion during April-June 2017. The foreign exchange reserves in nominal terms (including valuation effects) decreased by US$ 18.8 billion during April-June 2018 as against an accretion of US$ 16.6 billion in the preceding year (Table 2).

Table 2: Comparative Position of Variation in Reserves
(US$ billion)
Items 2018-19 2017-18
April-June April-June
1 Change in Foreign Exchange Reserves 
(Including Valuation Effects)
-18.8 16.6
2 Valuation Effects
(Gain (+)/Loss (-))
-7.5 5.2
3 Change in Foreign Exchange Reserves on BoP basis 
(i.e., Excluding Valuation Effects)
-11.3 11.4
Note: Increase in reserves (+)/Decrease in reserves (-).
Difference, if any, is due to rounding off.

The valuation loss, mainly reflecting the appreciation of the US dollar against major currencies, amounted to US$ 7.5 billion during April-June 2018 as against a gain of US$ 5.2 billion in April-June 2017.

Jose J. Kattoor
Chief General Manager

Press Release: 2018-2019/575

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