The Reserve Bank of India (RBI) sold a net $9.28 billion in the spot foreign exchange market in October, according to data published in its monthly bulletin on Tuesday.
Breakdown of Activity
- The central bank purchased $27.5 billion and sold $36.78 billion during October.
- This marks a reversal from September, where the RBI recorded a net purchase of $9.64 billion in the spot market.
Purpose of Intervention
The RBI actively intervenes in both spot and forward markets to manage exchange rate volatility. In recent months, these interventions have aimed to ensure the Indian rupee moves in an orderly manner amidst global and domestic economic pressures.
Rupee Movement and Forward Sales
- The Indian rupee depreciated by 0.3% against the U.S. dollar in October, trading within a range of 83.79 to 84.0950 during the month.
- The RBI’s net outstanding forward sales rose sharply to $49.18 billion by the end of October, compared to $14.58 billion at the end of September.
Record Low for Rupee
On Tuesday, the rupee reached an all-time low for the sixth consecutive trading session, touching 85.2075 against the dollar before closing at 85.20.
This consistent depreciation reflects continued pressure on the local currency, driven by a combination of global factors and domestic economic conditions.
