80% of RBI's forex assets deployed in overseas sovereign bonds and securities

The Reserve Bank of India has increased its investment in US treasury bonds and top-rated sovereign bonds in the second half of fiscal year 2022-23, according to its latest report on foreign exchange management. The bank's total foreign currency assets were $509.69bn at the end of March 2023, with $411.65bn invested in securities. While the central bank has increased exposure in securities at a time of hardening interest rates and potential mark-to-market losses, market analysts have suggested that it will earn higher interest on new investment and optimise returns within the framework of its twin objectives of safety and liquidity.

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