Further, the valuation of foreign exchange transactions, provided taken at historical costs, may also help the RBI
The central government is reportedly expected to make windfall gains through the annual receipts from the Reserve Bank of India (RBI). As per a report, these receipts are estimated to have made good gains in foreign currency trading and by lending to local banking system.
According to a report in the Economic Times, the RBI may have reportedly made good gains in the mentioned receipts due to a rise in policy rates and other factors. Even the Union Budget 2023 estimated receipts of Rs 48,000 crore in FY24 by way of total dividends from public sector banks and the central bank.
It adds that combined gains out of foreign currency sales and interest on loans to local banks, “may more than offset the market-to-market losses on bond portfolios – both local and overseas.”
Further, the valuation of foreign exchange transactions, provided taken at historical costs, may also help the RBI.
The report also suggests that a higher outgo on dividends may also be due to higher interest rates during the year, at a time when the RBI was on the lines of a reverse repo mode. Coming to FY22, the RBI has also reportedly earned Rs 1,500 crore on domestic loans and advances on a portfolio of Rs 1.3 lakh crore.