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Sources of Variation in Foreign Exchange Reserves in India during 2018-19

Jun 28, 2019: Earlier today, the Reserve Bank of India released the balance of payments (BoP) data for January-March 2019 on its website. On the basis of these data, the sources of variation in foreign exchange reserves during 2018-19 have been compiled.

Sources of Variation in Foreign Exchange Reserves: 2018-19

During 2018-19, 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*

Sources of Variation in Foreign Exchange Reserves in India during 2018-19

On a balance of payments basis (i.e., excluding valuation effects), the foreign exchange reserves decreased by US$ 3.3 billion during 2018-19 as against an increase of US$ 43.6 billion during 2017-18. The foreign exchange reserves in nominal terms (i.e., including valuation effects) decreased by US$ 11.7 billion during 2018-19 as against an increase of US$ 54.6 billion during the same period of the preceding year (Table 2).

Table 2: Comparative Position of Variation in Reserves


The valuation loss, mainly reflecting the appreciation of the US dollar against major currencies, amounted to US$ 8.3 billion during 2018-19 as against a gain of US$ 11.0 billion during the same period of the preceding year.



Source: RBI

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