RBI net sells $3.6 bn in Jun, net short dollar position dips to $60.39 bn

The RBI reversed its forex stance in June with $3.6 bn net sales, while rupee's REER stayed flat and forward dollar short positions dropped further to $60.39 bn

The Reserve Bank of India (RBI) was a net seller of foreign exchange in June, offloading $3.6 billion after a net purchase of $1.76 billion in May, according to the central bank’s monthly bulletin.

 

The RBI bought $1.16 billion while selling $4.82 billion in June. It had turned a net buyer only in May and March this year, remaining a net seller in the other three months — January, February, and April.

Forward market exposure

The outstanding net short dollar position in the rupee forward market fell further to $60.39 billion by the end of June, from $65.21 billion at the end of May. In April, the figure had stood higher at $72.57 billion.

 

 

Of the $60.39 billion net short position, $2.5 billion was in one-month contracts, $11.8 billion in one-to-three month tenures, $25.9 billion is set to mature between three months and a year, and the remaining $20 billion in contracts exceeding one year.

Dollar index and rupee REER

The dollar index, which measures the strength of the greenback against a basket of six major currencies, fell 2.15 per cent in June.

 

Meanwhile, the Real Effective Exchange Rate (REER) of the rupee stood at 100.37 in July, largely flat compared to June. The REER was 101.12 in May. Before May, the index had risen after five consecutive months of moderation since December 2024. Earlier, the REER had steadily climbed from 103.66 in January 2024 to a peak of 108.14 in November.

 

The REER adjusts the Nominal Effective Exchange Rate (NEER) to account for inflation differentials between India and its major trading partners. A value above 100 indicates appreciation of the rupee relative to the base year, potentially reducing competitiveness of Indian exports in global markets.