The central bank could generate a higher surplus for FY25 on the back of gains from substantial dollar sales along with interest earnings from foreign and rupee-denominated securities.
“Earnings on foreign exchange (FX) transactions are expected to be substantial with gross dollar sales tracking at $371.6 billion in FY25 (till February) v/s $153 billion in FY24. Historical cost of dollar purchase is tracking at 68.4, which remains substantially below the current spot rate. The combination of large quantum of gross dollar sales and low historical cost is expected to result in large gains from FX intervention. Meanwhile, interest income from RBI holdings of foreign currency assets and rupee securities is expected to be slightly lower than last year,” said Gaura Sen Gupta, chief economist at IDFC FIRST Bank.
The RBI has been a net seller of dollar since October 2024 till February 2025. The data for March is yet to be released.
However, it was a net buyer of dollars in the first half of the financial year (H1FY25), with $8.52 billion worth of US dollars purchased during the period. In FY24, the RBI had net bought $41.27 billion.
Each year, the central bank transfers a portion of its surplus income to the government. This surplus is generated from investment earnings, valuation gains on its foreign exchange reserves, and fees from currency issuance. As mandated by the RBI Act, the central bank makes this transfer after setting aside provisions for bad debts, asset depreciation, employee welfare, and other contingencies.
Experts said the RBI accumulated US dollars when the exchange rate was relatively low, in the ₹83 per dollar-₹84 per dollar range, and sold them later at higher rates, between ₹84 per dollar and ₹87 per dollar, realising a profit.
“The gains can be due to the intervention as the RBI was selling dollars essentially. I think also some gains might be there in terms of their gold holding,” said Sakshi Gupta, principal economist at HDFC Bank.
As per Budget estimates, the government expects to receive ₹2.56 trillion from the RBI and public sector banks.
In a note, the State Bank of India (SBI) said that amid a challenging global environment, the RBI’s proactive management of external shocks justifies the expected rise in dividend payouts, underscoring its role as a key contributor to the government’s fiscal resources.
“As the central bank continues to stabilise the rupee by purchasing foreign currencies, the resulting liquidity boost could significantly improve the RBI’s financial position, contributing to higher profitability and larger dividend payouts in FY25,” the SBI report said.
 "RBI, Reserve Bank of India")