India, May 24 -- The record dividend announced by the Reserve Bank of India to the central government for the financial year 2025-26 was largely driven by "revaluation gains on foreign exchange reserves" and higher earnings from government bond holdings, according to a research note by Bank of Baroda economist Dipanwita Mazumdar.

The RBI on Friday announced a surplus transfer of Rs 2.87 lakh crore to the government for 2025-26, higher than the Rs 2.68 lakh crore transferred in the previous financial year.

Explaining the reasons behind the higher payout, the report said, "The higher surplus can be attributed to revaluation gains on forex reserves."

In simple terms, the RBI benefited from the sharp rise in the dollar against the rupee ov...