Earlier today, the Reserve Bank of India released the balance of payments (BoP) data for January-March 2021 on its website (www.rbi.org.in). On the basis of these data, the sources of variation in foreign exchange reserves during 2020-21 are detailed below.
Sources of Variation in Foreign Exchange Reserves: 2020-21
During 2020-21, there was an increase in the foreign exchange reserves, the sources of which are set out in Table 1.
On a balance of payments basis (i.e., excluding valuation effects), foreign exchange reserves increased by US$ 87.3 billion during 2020-21 as against an increase of US$ 59.5 billion during 2019-20. Foreign exchange reserves in nominal terms (including the valuation effects) increased by US$ 99.2 billion during 2020-21 compared with US$ 64.9 billion in the preceding year (Table 2).
The valuation gain, reflecting depreciation of US dollar against major currencies and increase in gold prices, amounted to US$ 11.9 billion during 2020-21 compared with US$ 5.4 billion during 2019-20.
Press Release: 2021-2022/456