RBI's August dollar buying spikes to a record $43.26 billion

According to the RBI’s monthly bulletin, the central bank recorded a net purchase of $43.26 billion in dollars during August, more than twice the $18.65 billion bought in July. The surge was driven by dollars mobilised under the RBI’s concessional swap window for FCNR(B) deposits, external commercial borrowings and overseas foreign-currency borrowings, which were then returned to the bank. The facility’s closure was moved forward to August 31 after banks had mobilised $52.3 billion by mid-month.

Overall, the RBI bought $74.47 billion and sold $31.21 billion in the period, turning a net buyer after a stretch of net selling in previous months. Its net short position in the forward market climbed to a record $200.06 billion, with short contracts under one year at $55.15 billion and those over one year nearly doubling to $176.57 billion. Long dollar positions rose sharply to $31.66 billion, all maturing within a month, reducing the net short position for contracts under one year to about $23.5 billion. The rupee’s real effective exchange rate was 89.35 in September, up from 88.72 in August.