Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ... 

Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

The potential impact of RBI’s historic Rs 2.1 lakh crore dividend payout on India’s credit rating

Reading Time: < 1 minute

The government of India is set to receive a record-breaking dividend of Rs 2.1 lakh crore from the Reserve Bank of India (RBI), nearly double the amount budgeted from all financial institutions combined. This windfall is a positive development for the country, with several factors contributing to the record profit.

According to a TOI analysis by Mayur Shetty, the significant increase in interest rates in the United States has played a role in the RBI’s earnings. The central bank invests a substantial portion of its $644 billion foreign exchange reserves in the US, and the higher interest rates have led to increased profits.

Additionally, the RBI has been actively buying and selling dollars this year, especially as foreign institutional investors have been selling equities. The central bank’s money market operations, aimed at maintaining liquidity in a deficit mode to combat inflation, have also contributed to its earnings.

While generating profits is not the primary goal for the RBI, the surplus is a byproduct of its efforts to maintain financial and market stability. The record surplus could help improve India’s credit rating, with S&P indicating that it could reduce the fiscal deficit by approximately 0.35% of the GDP.

The news of the record dividend has led to a rally in the bond market, with markets anticipating a significant decrease in government borrowing. This could lead to lower interest rates, benefiting both corporate borrowers and consumers. Overall, the windfall from the RBI is seen as a positive sign for the Indian economy, attracting global investors and potentially leading to a ratings upgrade.

Taylor Swifts New Album Release Health issues from using ACs Boston Marathon 2024 15 Practical Ways To Save Money