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RBI's Net Dollar Purchases Reach Record $43.26 Billion in August
Sentiment: NeutralHigh Priority
What Happened?
The Reserve Bank of India (RBI) net purchased a record $43.26 billion in August, significantly up from $18.65 billion in July. This increase is attributed to the central bank's concessional swap facility for foreign currency deposits.
Key points
- RBI's net dollar purchases in August were $43.26 billion, up from $18.65 billion in July.
- The central bank bought $74.47 billion and sold $31.21 billion in August.
- Cumulative net dollar buying in FY27 reached $47.43 billion by August-end.
- The outstanding net short dollar position in the forward market rose to $200.06 billion by August-end.
- The real effective exchange rate (REER) of the Indian rupee was 89.35 in September.
Key insights
- The increase in dollar purchases may help stabilize the Indian rupee against global currencies.
- A higher REER could make Indian exports less competitive in international markets.
- The RBI's shift from net selling to net buying indicates a strategic response to market conditions.
Why it matters
The RBI's dollar purchases could impact the Indian currency's stability and trade competitiveness.
Tags
Entities
Reserve Bank of India· OrganizationIndian rupee· Currency
Source
Business Standard
