RBI Sells $3.86 Billion in August Spot Forex Market
Reserve Bank of India Sells Net $3.86 Billion in Spot Forex Market
In August, the Reserve Bank of India (RBI) sold a net of $3.86 billion in the spot foreign exchange market, as revealed in the central bank’s monthly bulletin. This figure includes $500 million in purchases and $4.36 billion in sales during the period. Comparatively, in July, the RBI had purchased a net of $3.47 billion in the spot market. The Indian rupee experienced a 0.6% depreciation against the dollar in August, trading between 82.25 and 83.16.
RBI’s Net Outstanding Forward Purchase Stands at $10.07 Billion
As of the end of August, the RBI’s net outstanding forward purchase amounted to $10.07 billion. This represents a decrease from the previous month’s figure of $19.47 billion. The central bank’s role in the spot and forwards market is to manage exchange rate volatility.
RBI Intervenes in Spot and Forwards Market to Prevent Rupee Weakening
To prevent the rupee from weakening beyond its lifetime low of 83.29 against the dollar, the RBI has been intervening in the spot and forwards market over the past few weeks, according to traders. On Thursday, the currency was trading at 83.2450 against the dollar.
In conclusion, the RBI’s actions in the spot and forwards market aim to stabilize the Indian rupee and manage exchange rate fluctuations.