The Reserve Bank of India (RBI) witnessed a substantial 52 per cent surge in gains from foreign exchange transactions in FY26, reaching Rs 1.69 trillion, even as the rupee depreciated by 9.85 per cent and the central bank actively intervened in the spot market.
Key Points
- The Reserve Bank of India's gains from foreign exchange transactions increased by 52 per cent year-on-year to Rs 1.69 trillion in FY26.
- The RBI sold a gross $195 billion in the spot market during FY26 to mitigate volatility, as the rupee depreciated by 9.85 per cent.
- The central bank recorded a net unrealised loss of Rs 43,403 crore from marking-to-market outstanding forward contracts as of March 31, 2026, a first in at least five years.
- RBI's balance sheet expanded by 20.6 per cent to Rs 91.97 trillion in FY26, driven by increases in domestic investments, gold, and foreign investments.
- Income for FY26 rose 26.4 per cent to Rs 3.38 trillion, while expenditure increased by 7.8 per cent to Rs 50,995 crore.
The Reserve Bank of India's (RBI's) gains from foreign exchange transactions rose 52 per cent year-on-year (Y-o-Y) during 2025-26 (FY26), according to the central bank's annual report released on Friday.
The gains from foreign exchange transactions stood at Rs 1.69 trillion in FY26 against Rs 1.11 trillion during FY25. In FY26, the central bank sold a gross $195 billion in the spot market to curb volatility in the foreign exchange market.
The rupee depreciated 9.85 per cent in FY26. In March, the Indian unit fell close to 4 per cent following the West Asia war that started in late February.
Marking-to-Market Losses and Forward Contracts
The annual accounts also showed that marking-to-market of outstanding forward contracts as on March 31, 2026, resulted in a net unrealised loss of Rs 43,403 crore.
This compares with a net unrealised gain of Rs 6,985 crore as on March 31, 2025.
The loss was debited to the Foreign Currency Forward Contracts Valuation Account (FCVA) with a contra credit to the Provision for Forward Contracts Valuation Account (PFCVA).
The outstanding net short position of its forward pool swelled to $103.06 billion by end March from $84.3 billion a year ago.
Data showed that the central bank booked a mark-to-market net loss on outstanding forward contracts for the first time in at least five years.
The RBI said the debit balance in FCVA was adjusted against the contingency fund on March 31, 2026 and reversed on the first working day of the following year.
This was in line with the extant accounting policy. Accordingly, the balance in FCVA stood at nil at the end of FY26.
Balance Sheet Expansion and Income Growth
In FY26, RBI's balance sheet size rose 20.6 per cent to Rs 91.97 trillion.
Increase on the assets side was due to rise in domestic investments, gold and foreign investments by 44.9 per cent, 63.8 per cent and 7.9 per cent, respectively.
On the liabilities side, revaluation accounts, notes issued, deposits and other liabilities increased by 63.4 per cent, 11.8 per cent, 11.6 per cent and 21.1 per cent, respectively.
Income for FY26 rose 26.4 per cent to Rs 3.38 trillion from Rs 2.67 trillion in the previous financial year.
Expenditure increased 7.8 per cent to Rs 50,995 crore from Rs 47,286 crore.
Domestic assets constituted 29.1 per cent and foreign currency assets, gold (including gold deposit and gold held in India), loans and advances to financial institutions outside India constituted 70.9 per cent of the total assets as on March 31, 2026.
This is against 25.7 per cent and 74.3 per cent, respectively, as on March 31, 2025.
A provision of Rs 1.09 trillion was made and transferred to the contingency fund.
Gold Holdings and Investment Revaluation
Meanwhile, the central bank's holdings of domestic securities increased 44.9 per cent to Rs 22.59 trillion as on March 31, 2026 from Rs 15.59 trillion a year earlier.
The increase was mainly due to net purchase of government securities during the year.
Investments comprise dated government rupee securities, state government securities and oil bonds.
The RBI held 880.52 tonnes of gold as on March 31, 2026, of which 312.32 tonnes were held as backing for notes issued.
The value of gold held as assets of the issue department rose 64.1 per cent in FY26 to Rs 3.88 trillion from Rs 2.37 trillion a year earlier.
The increase in value was attributed to the rise in the price of gold during the year.
Balances under the Currency and Gold Revaluation Account (CGRA) increased to Rs 21.69 trillion at end-March 2026 from Rs 13.03 trillion a year earlier.
The balance in the Investment Revaluation Account-Rupee Securities stood at nil in FY26 against Rs 16,843 crore in FY25.
Foreign Currency Assets Valuation Account balance also declined to nil from Rs 6,985 crore.
