The Reserve Bank of India (RBI) is expected to transfer a record-breaking dividend of up to ₹3 lakh crore ( approx. US $35 Billion) to the government for FY25, significantly surpassing last year's ₹2.11 lakh crore reported the Economic Times and other media outlets. This surge is attributed to robust earnings from dollar sales, rising gold prices, and gains from government securities.
The final amount will be determined in the RBI board meeting on May 23, following a review of the Economic Capital Framework (ECF).
This higher dividend could help manage the fiscal deficit and improve liquidity in the banking system. Economists suggest that the surplus transfer might range between ₹2.5 lakh crore to ₹3 lakh crore, depending on provisioning levels.
The reported 3 lakh crore in Dividends to the government for FY25, marks a nearly 50% increase from last year’s ₹2.11 lakh crore. This surge is driven by robust earnings from dollar sales, rising gold prices, and gains from government securities.
Key Factors Behind the Higher Dividend:
- Dollar Sales: The RBI sold $371.6 billion in FY25 to stabilize the rupee, significantly boosting its earnings.
- Gold Price Surge: Appreciation in gold prices contributed to valuation gains
- Government Securities: Market-to-market gains on RBI’s holdings of rupee securities added to the surplus.
Impact on India’s Economy:
Fiscal Deficit Management: The surplus transfer will help the government reduce fiscal deficit and maintain liquidity in the banking system.Bond Market Influence: A higher-than-expected dividend could impact bond yields, with markets already factoring in a ₹2.5 lakh crore payout.
Banking Liquidity: The dividend is expected to increase liquidity in the system, potentially reaching ₹6 lakh crore
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