Noida, June 8 (APAC Media): The Reserve Bank of India (RBI) on Monday released its Balance of Payments (BoP) data for the fourth quarter and full fiscal year 2025–26, detailing the key drivers of movement in India’s foreign exchange reserves.
India’s current account deficit widened to US$25.4 billion in 2025–26 from US Dollar 23.1 billion in the previous fiscal year, according to official data.
Meanwhile, net inflows under the capital account fell sharply to US Dollar 1.8 billion, compared with US Dollar 18.0 billion recorded a year earlier, indicating a significant moderation in capital inflows.
Foreign direct investment (FDI) inflows increased to US Dollar 6.9 billion during the period.
However, portfolio investment registered net outflows of US Dollar 16.4 billion, weighed down by heightened volatility in global financial markets.
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India’s external sector remained broadly stable despite volatility in portfolio flows and an uncertain global environment, supported by valuation gains and steady capital inflows, the Reserve Bank of India (RBI) said.
The central bank added that the current account deficit widened modestly during the period.
Within capital flows, banking capital rose to US Dollar 6.4 billion, supported by robust non-resident Indian (NRI) deposits of US Dollar 14.4 billion.
Short-term credit inflows rose to US Dollar 13.7 billion, while external commercial borrowings increased to US Dollar 11.1 billion.
External assistance moderated to US Dollar 2.6 billion, while “other” items in the capital account recorded a higher outflow of US Dollar 22.7 billion.
The central bank said reserves continue to be supported by banking capital, external commercial borrowings and stable NRI deposits, while portfolio flows remain sensitive to global risk sentiment.
It reiterated its commitment to maintaining orderly foreign exchange market conditions and ensuring adequate liquidity to support macroeconomic stability.
On the valuation side, gains surged to US Dollar 46.4 billion in 2025–26, driven mainly by higher gold prices and the depreciation of the US dollar against major currencies.
Overall, foreign exchange reserves rose by US Dollar 22.8 billion in nominal terms during the period, but fell by US Dollar 23.6 billion on a balance of payments basis after excluding valuation effects, the RBI expressed.
–ENDS–
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