RBI Annual Report: Central Bank Sees India Growing 6.9% In FY27 If Middle East Impact Remains Contained; Forex Gains Surge Over 50%

Mumbai, May 29: The Reserve Bank of India has projected India’s real GDP growthat 6.9% in FY27 with risks tilted to the downside. 

The estimate, based on the assumption that the adverse impact of the West Asia conflict would remain contained in the near-term, is higher than the International Monetary Fund’s 6.5%.

In its annual report, the RBI said India remained the fastest-growing major economy globally, supported by strong domestic consumption, sustained investment, proactive policy initiatives and sound macroeconomic fundamentals. The central bank noted that India expanded at 7.6 per cent during 2025-26 (up from 7.1 per cent a year ago). 

FY26 Forex Gains Jump

The Reserve Bank of India’s gains from foreign exchange transactions surged 52% to Rs 1.69 lakh crore in FY26 as the central bank stepped up intervention in currency markets to shield the rupee from heightened volatility triggered by rising crude oil prices and geopolitical tensions in West Asia.

The central bank earns the gains by selling dollars from its reserves in the foreign exchange market to stabilise the rupee. 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 lakh crore, indicating a sharp jump in intervention-related income over the last fiscal year.

Rupee Pressure Led to Aggressive Intervention

The RBI significantly ramped up its currency market operations through FY26 as the rupee came under pressure from rising oil prices, foreign capital outflows and uncertainty stemming from the Iran conflict.

The Indian 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’s interventions intensified particularly after crude oil 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 Indian refiners and importers, putting additional pressure on the rupee.

Interest Income Also Rises

Apart from forex transaction gains, the RBI also earned higher income from its investments in foreign securities such as U.S. Treasury bonds.

Interest income from foreign securities rose to Rs 1.07 lakh crore in FY26 from Rs 97,007 crore in the previous fiscal year.

Meanwhile, the RBI’s balance sheet expanded 20.61% year-on-year to Rs 91.97 lakh crore as of March 31, 2026.

The strong income growth helped the central bank announce a record transfer of Rs 2.87 lakh crore to the central government earlier this month for FY26.

Source:

• RBI annual report