MUMBAI: The Reserve Bank has said its gains from forex interventions in the currency market jumped 52% to Rs 1.69 trillion in FY26 as it net sold a whopping $53.13 billion to prop the rupee that was under intense pressure and had lost 9.9%, becoming the worst Asian currency for the second year in a row.
In the FY26 annual report released Friday, the RBI said the gains from foreign exchange transactions surged 52% to Rs 1.69 trillion in FY26 up from Rs 1.11 trillion in the previous fiscal, as the central bank stepped up intervention in the currency markets to shield the rupee from heightened volatility triggered by rising crude prices and geopolitical tensions in West Asia.
In fiscal 2026, the Reserve Bank net sold a record $53.13 billion in the spot foreign exchange market to defend the rupee. During the year, the central bank sold nearly $195 billion and bought back around $142 billion, leading to a net sale of $53.13 billion. This surpassed the $34.51 billion net sales in FY25 when the rupee was marginally better and had lost only 5.4%.
The heaviest sell-offs occurred during the late 2025 tariff and capital outflow concerns, with October recording the highest monthly net sale of $11.88 billion, followed by $10.02 billion in December.
It can be noted that the central bank gains when it sells dollars from its reserves in the foreign exchange market to stabilise the rupee and makes losses depending on the exchange rate if it buys too much dollars. These transactions are benchmarked against the historical average price at which the RBI accumulated dollars in the past.
In FY25, the RBI had reported foreign exchange transaction gains of Rs 1.11 trillion, indicating a sharp jump in intervention-related income over the last fiscal year.
The RBI significantly ramped up its currency market operations through FY26 as the rupee came under pressure from rising crude prices, foreign capital outflows, which topped Rs 1.8 trillion, and uncertainty stemming from the Iran war.
The rupee had weakened sharply earlier this year, with the RBI actively selling dollars to curb excessive volatility and prevent disorderly movements in the currency market.
The central bank interventions intensified particularly after crude prices spiked due to fears of supply disruptions around the Strait of Hormuz, a critical global oil shipping route. The rise in oil prices increased dollar demand from domestic refiners and importers, putting additional pressure on the rupee.
Apart from forex transaction gains, the RBI also earned higher income from its investments in foreign securities such as US treasury bonds, which has been coming down regularly of late and stood at $182.9 billion in December 2025 from $225.7 billion in January 2025, according to the US treasury department. The doling is down 26% from the 2023 peak.
Interest income from foreign securities rose to Rs 1.07 trillion in FY26 from Rs 97,007 crore in the previous fiscal year, the report said.