India's Forex Surge: A Testament to Financial Market Resilience

India's forex market has nearly doubled its average daily turnover from USD 32 billion in 2020 to USD 60 billion in 2024, as highlighted by RBI Governor Sanjay Malhotra. The robust growth complements expansions in overnight money and government securities markets, underscoring the vital role of financial markets in economic progress.

India's foreign exchange market has experienced dramatic growth, soaring from an average daily turnover of USD 32 billion in 2020 to USD 60 billion in 2024. Reserve Bank of India (RBI) Governor Sanjay Malhotra emphasized this remarkable advancement during his speech at the 24th FIMMDA-PDAI Annual Conference in Bali.

Governor Malhotra remarked on the enhanced dynamism and resilience of India's financial markets, noting the transformation over the past few years. He stated, "Over the past few years, we have witnessed significant developments that have transformed our markets into a dynamic and resilient force." The forex market's nearly doubled turnover exemplifies this progress.

The forex market's growth is paralleled by expansions in other sectors. India's overnight money market has seen an 80 percent increase in daily volumes, skyrocketing from approximately Rs 3 lakh crore in 2020 to over Rs 5.4 lakh crore in 2024. Similarly, the government securities market has reported a 40 percent rise, reaching an average daily volume of Rs 66,000 crore during this period.

Malhotra highlighted the pivotal role of financial markets in India's economic journey. "If India is to navigate the shifting tides and fulfill its aspirations, financial markets will have to play a crucial role," he asserted. Beyond capital raising and asset trading, these markets are essential enablers of economic growth.

Despite global challenges, India's government securities market demonstrated stability throughout the fiscal year 2024-25, with gross market borrowings for central and state governments amounting to Rs 24.7 lakh crore, executed smoothly. As Malhotra declared, "The government securities market has, however, remained rock-steady throughout the year."

In conclusion, Malhotra praised India's progress in developing financial markets, driven by evolving national needs and lessons from past crises. He lauded the state-of-the-art market infrastructure and transparency levels that match global standards.

(With inputs from agencies.)