Reserve Bank of India net sells $1.5 billion foreign currency in September

In the second quarter of the current financial year, the RBI purchased a net total of $1.9 billion of foreign currency, against $33.7 billion in the second quarter of the previous financial year

The central bank recorded a net total of $1.5 billion in foreign currency sales in September, according to the Reserve Bank of India’s (RBI’s) monthly bulletin. During the same period, the RBI purchased $27.8 billion and sold $29.3 billion worth of foreign currency.

In August, the RBI reported a net sale of $3.9 billion in the spot market, marking the first time it became a net seller of the dollar in the current financial year (2023-24).

During the second quarter of the current financial year, the RBI acquired a net total of $1.9 billion in foreign currency, a significant decrease from the $33.7 billion recorded in the same quarter of the previous financial year (2022-23).

For the first six months of the current financial year, the central bank made a net purchase of $17.7 billion, a stark contrast to the net sale of $33.4 billion in the first half of the previous financial year.

In September, the rupee depreciated by 0.3 per cent. By the end of September, the RBI’s net outstanding forward purchase stood at $4.64 billion, a decrease from the $10.07 billion reported in August.

Throughout the current financial year, the rupee has experienced a depreciation of 1.3 per cent, following a 7.8 per cent fall in the previous financial year. In the current calendar year, the rupee has depreciated by 0.6 per cent.

During the first six months of the calendar year, the local currency appreciated by 0.16 per cent.

It’s noteworthy that as of December 30, 2022, India’s foreign exchange reserves amounted to $562.8 billion, expanding by approximately $33 billion over the first half of the year 2023.