The RBI’s balance-sheet increased by Rs 4.7 lakh crore in FY22, registering a growth of 8.3% over FY21.
The percentage increase appears lower than the trendline growth of 13-14% prior to the pandemic period, but FY22 data isn’t strictly comparable as the central bank presented a truncated balance-sheet (adopting a April-March cycle) for nine months in FY21. Given the prevailing global conditions, anyalsts do not expect a significant increase in the central bank’s assets and liabilities even this fiscal.
Based on RBI’s assets and liabilities data published weekly, in absolute terms, the central bank’s balance-sheet grew from Rs 56.70 lakh crore as on April 1, 2021, to Rs 61.40 lakh crore as on April 1, 2022. Weekly data is broadly considered accurate, though the final figures will be presented in the annual report, which will be released in May.
As a percentage of GDP, RBI’s total assets stood at 26.45%, down from 29% in FY21. Analysts say the central bank’ balance-sheet is undergoing a correction following an unprecedented expansion during the pandemic year FY20 when assets and liabilities grew by a record Rs 12 lakh crore. In FY21, the accounts presented for nine months showed a modest expansion of Rs 3.7 lakh crore, but thanks to expenditure contraction and significant reduction towards provision for contingency fund, RBI managed to transfer a staggering Rs 99,122 crore surplus to the central government last year.
“During the pandemic period, RBI has mopped up bonds and increased its forex reserves. Though with the Covid restrictions easing and to fight against volatility in rupee during the recent Russia-Ukraine crisis, we have seen reserves dwindling. Now that the US Federal Reserve has embarked on the rate hike path, we may see the balance sheet to stop growing and settle a little lower in the current fiscal,” Amit Kumar Gupta, Founder & CIO, FinTrekk Capital told Express.
Like last year, this year too RBI continued its aggressive mopping up of forex currency assets. As on April 1, they stood at Rs 41.1 lakh crore, or 67% of RBI’s total assets, down from about 69% a year ago. But this was expected given that RBI has begun withdrawing the accommodation.