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With capital flows rising, the Reserve Bank of India (RBI) bought $11.20 billion in September, in contrast to the vulnerable climate in July 2013, when it pumped in $6 billion to arrest a sharp slide in the rupee.
On a net basis RBI bought $1.43 billion compared with the sale of $511 million in August. In September 2013, RBI on a net basis had sold dollars worth $3.5 billion.
The intention has been to absorb the capital flows to build reserves. RBI's forex reserves rose by $ 1.73 billion for the week ending October 31 to $ 315.91 billion, shows latest RBI data released Friday. The rise in reserves marks one of the sharpest rise in reserves. The last time foreign exchange reserves had risen by $ 2.71 billion in the week ending July 25 to $ 320.56 billion. On Monday, the rupee ended at 61.51 compared with previous close of 61.6.
RBI's net forward purchases rose in September to $8.4 billion, from a net forward purchase of $5.8 mn in August.
