The Reserve Bank of India posted a net sale of $3.6 billion in the foreign exchange market in April – marking the first net dollar sale in four months – as rising tensions in the Middle East prompted the central bank to intervene in the market to stem the rupee’s volatility. exchange rate.
On a total basis, the central bank sold $11.65 billion in the currency market in April while buying $8 billion, the latest RBI data showed.
In April, the rupee weakened to record lows against the US dollar on several occasions due to dollar strength as the military confrontation between Iran and Israel fueled global risk aversion and investors fled to the safety of the American currency.
The RBI also intervened strongly in other market segments, with the central bank’s net outstanding forward dollar book at (-)$16.3 billion at the end of April. This shows that in April RBI sold dollars for forward delivery.
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