Sources of Variation in India’s Foreign Exchange Reserves during April-September 2025

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Published on December 01, 2025

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Sources of Variation in India’s Foreign Exchange Reserves during April-September 2025

Today, the Reserve Bank of India released the balance of payments (BoP) data for the second quarter (Q2), i.e., July-September of 2025-26, on its website (www.rbi.org.in). On the basis of these data, the sources of variation in foreign exchange reserves during April-September 2025 are detailed below in Table 1.

Table 1: Sources of Variation in Foreign Exchange Reserves*
(US$ billion)
Items			April-September 2024	April-September 2025
I.		Current Account Balance	-25.3	-15.1
II.		Capital Account (net) (a to f)	49.2	8.6
	a.	Foreign Investment (i+ii)	24.2	3.6
		(i) Foreign Direct Investment (FDI)	3.4	7.7
		(ii) Portfolio Investment	20.8	-4.1
	b.	Banking Capital	9.0	0.3
		of which: NRI Deposits	10.2	6.1
	c.	Short-term Credit	7.5	2.9
	d.	External Assistance	3.5	1.2
	e.	External Commercial Borrowings	3.5	4.5
	f.	Other Items in Capital Account	1.4	-3.9
III.		Valuation Change	35.5	38.2
IV.		Total (I+II+III) @ Increase in reserves (+) / Decrease in reserves (-)	59.4	31.8
: Based on the old format of BoP (BPM5) 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$ 6.4 billion during April-September 2025 as against an accretion of US$ 23.8 billion during April-September 2024. Foreign exchange reserves in nominal terms (i.e., including valuation effects) increased by US$ 31.8 billion during April-September 2025 as compared with an increase of US$ 59.4 billion in April-September 2024 (Table 2).

Table 2: Comparative Position of Variation in Reserves
(US$ billion)
Items		April-September 2024	April-September 2025
1.	Change in Foreign Exchange Reserves (i.e., Including Valuation Effects)	59.4	31.8
2.	Valuation Effects [Gain (+)/Loss (-)]	35.5	38.2
3.	Change in Foreign Exchange Reserves on BoP basis (i.e., Excluding Valuation Effects)	23.8	-6.4
Notes: 1. Increase in reserves (+)/Decrease in reserves (-). 2. Difference, if any, is due to rounding off.

The valuation gain, primarily reflecting higher price of gold, depreciation of US dollar against major currencies and lower bond yields, increased to US$ 38.2 billion during April-September 2025 from US$ 35.5 billion during April-September 2024.

(Brij Raj)
Chief General Manager

Press Release: 2025-2026/1599