Net short position of RBI's forward book swells to $67.9 billion

REER moderates to 104.82 in January

The Reserve Bank of India (RBI) net sold $15.1 billion in December in the spot foreign exchange market, after a record net sale of $20.2 billion in November, according to the latest data released on Wednesday.

 

The net short position in the forward market rose further to $67.9 billion by the end of the month, from $58.9 billion in November.

 

According to the central bank’s monthly bulletin, the RBI bought $53.8 billion, while it sold $69.04 billion of foreign currency in December.

 

The rupee had depreciated by 1.31 per cent in December.

 

“The RBI intervened because there were sudden outflows, while the inflows were gradual, they had to contain the volatility,” said the treasury head at a private bank.

 

“We have to also look at the emerging market currency movements, apart from the dollar index, the Chinese Yuan was down, which was putting pressure on the rupee,” he added. 

 

The Dollar index rose by 2.75 per cent in December. It measures the strength of the Greenback against a basket of six major currencies.

 

Meanwhile, the Real Effective Exchange Rate (REER) of the Indian Rupee (INR) continues to moderate, which fell to 104.82 in January, against 107.20 in December 2024.

 

The REER increased from 103.66 in January 2024 to 108.14 in November 2024.