The Reserve Bank of India’s (RBI’s) net buying of the US dollar from the spot market declined in March to $996 million from $1.66 billion in February. The central bank purchased $3.32 billion from the spot market and sold $2,332 million in March.
In the forward dollar market, the outstanding net forward purchase at the end of March was $20.85 billion. The net forward purchase at the end of February was $31.37 billion, according to the RBI’s monthly bulletin. The central bank’s intervention in the foreign exchange market is to curb volatility in the rupee. The RBI had net bought $1,665 million worth of foreign currency in February. In March 2017, the RBI was a net buyer of the US currency worth $3,538 million. It had bought $5,024 million and sold $1,486 million in the spot market.
For the full financial year 2017-18, the RBI had bought $33.69 billion dollars on a net basis, having bought $52.07 billion and sold $18.38 billion in the spot market. In FY17, the central bank was a net buyer of the dollar to the tune of $12.35 billion.