 "The RBI’s strategic .93 billion intervention stabilizes the depreciating rupee amidst fierce market volatility and global pressures.")
The Reserve Bank of India (RBI) has reported a significant activity in the foreign exchange Market, revealing it bought a net total of $6.93 billion in July. During this month, the RBI purchased $23.57 billion and sold $16.64 billion, marking a contrast to June when it sold a net amount of $2.11 billion. In July, the Indian rupee weakened by 0.4 percent against the dollar, trading between 83.37 and 83.75. The RBI’s measures involve intervening in both the spot and forward markets to stabilize the rupee. As of mid-September, the rupee stood at 83.5625, showing a weekly gain of nearly 0.4 percent and its strongest weekly rise this year.
The Reserve Bank of India (RBI) has recently reported significant activity in the foreign exchange Market. In July, the RBI bought a net total of $6.93 billion in the spot foreign exchange Market, according to their latest monthly bulletin released on September 20, 2024. The central bank purchased $23.57 billion while selling $16.64 billion during that month. This is a notable shift from June when the RBI sold a net of $2.11 billion.
The Indian rupee faced some challenges as it depreciated by 0.4 percent against the US dollar in July, marking its worst performance since March. Throughout the month, the rupee traded within the range of 83.37 to 83.75. As of the end of July, the RBI’s outstanding forward sales totaled $9.1 billion, down from $15.84 billion at the end of the previous month.
The RBI plays an essential role in managing the exchange rate, intervening in both the spot and forwards markets to reduce volatility. Interestingly, on the last trading day reported, the rupee settled at 83.5625, showing a weekly gain of nearly 0.4 percent, its strongest performance this year.
This information highlights the ongoing efforts of the RBI to stabilize the Indian currency amidst fluctuating Market conditions.
Tags: Reserve Bank of India, foreign exchange Market, Indian rupee, currency stabilization, RBI forex intervention.
- Why did the RBI buy $6.93 billion in the forex Market?
The RBI bought this amount to manage the value of the Indian rupee and ensure it stays stable against other currencies.
- What does it mean to buy in the spot forex Market?
Buying in the spot forex Market means purchasing currency for immediate delivery, helping to influence exchange rates quickly.
- How does this purchase affect the Indian economy?
Buying foreign currency can support the rupee’s strength, helping to keep inflation in check and make imports cheaper.
- Is this a common practice for the RBI?
Yes, the RBI regularly intervenes in the forex Market to manage currency fluctuations and maintain economic stability.
- What could happen if the RBI did not buy foreign currency?
If the RBI didn’t intervene, the rupee might weaken, which could lead to higher prices for imported goods and increased inflation.
