RBI balance sheet size increased by 9.48% in FY 2018 on the back of increase in forex assets, which increased by 11.24% year on year to Rs 26350 billion. RBI holding of government bonds decreased by 16.66% year on year to Rs 6297 billion.In the July 2017- November 2018 period, RBI sold Rs 900 billion of bonds through OMOs to negate the impact of maturing outstanding fx forward purchase contracts.In July 2017-June 2018 period, RBI net bought USD 10.39 billion. Currency in circulation rose 26.92% to Rs 19119 billion in 2017-18.
As INR has depreciated sharply since April, RBI has sold USD 14.34 billion in the April – June 2018 period, taking out Rs 976 billion of liquidity in the process. RBI will have to start becoming more aggressive on OMO purchases in order to keep liquidity easy in the system, as funding needs will increase in the busy season that starts in October.
RBI published its annual report for 2017-18 on the 29th of August 2018. The annual report is similar to a company’s annual report with a brief on the economy and on RBI’s operations in general and RBI’s balance sheet and income statements.
RBI is the sole supplier of liquidity to the system and the presentation on RBI Balance Sheet & Liquidity gives you an insight on how RBI increases or decreases its monetary base by increasing or decreasing reserves through its various operations.
