RBI sells dollars after 27 months

After nearly 27 months, the central bank sold about $1.5 billion in March 2008.

The last time RBI sold the greenback was in December 2005. It had sold $6.54 billion to State Bank of India for redeeming India Millennium Deposits (IMD) during that month, according to the RBI data.

Though it sold dollars in March 2008, on a net basis, RBI continued to be a buyer of the US currency during the month and mopped up $2.8 billion in March.

 

The rupee was showing a tendency for depreciation against the dollar in March. It moved between 39.91 to 40.72 to a dollar and has only showed a declining trend since then.

The treasury head of a mid-sized public sector bank said though a long gap between the two sale transactions evokes interest, it seems to be a part of the normal trading activity on the capital account.

According to the RBI data, after purchasing $13.62 billion in January, the highest purchase during any month in the last six financial years, the scale of buying from the market declined in February and March.

The purchases for the two months were estimated at $6.68 billion.