Central bank sells $2,487 mn in April

The Reserve Bank of India (RBI) sold $2,487 million in April, the first month of 2009-10, to support orderly trading in the foreign exchange market. On a gross basis, it bought $204 million and sold greenbacks amounting $2,691 million. It had sold net $34,922 million in 2008-09, according to the central bank’s monthly bulletin.

The highest sale was $18,666 million in October, when dollar liquidity in the global financial markets was sapped after the collapse of Lehman Brothers. Foreign exchange dealers said the RBI was not look at maintaining a particular value of the rupee against the US dollar. It intervenes in the market to prevent excess volatility, they say.

The rupee moved in the Rs 49.67-50.52 band in April. It has strengthened by 6.15 per cent since the end of March to close at 47.61, according to Bloomberg data. The real effective exchange rate of the Indian rupee against a six-currency basket was Rs 93.23 on May 15, compared with Rs 108.23 in May last year. Meanwhile, inflow of funds into NRI deposits in April 2009 was $ 296 million as against an outflow of $7 million in same period last year. The accretion to foreign currency non-resident (bank) deposits was $113 million, while it was $88 million in non-resident external (rupee) deposits.

The total inflow of NRI deposits in 2008-09 was $3,999 million. The outstanding NRI deposits at end of April 2009 were $41,908 million.