RBI net sold $3.6 billion in FX market in April amid global volatility
Reserve Bank of India net sold $3.6 billion in the foreign exchange market in April — marking the first net dollar sale in four months — as escalating tensions in the Middle East likely prompted the central bank to intervene in the market to curb volatility in the rupee’s exchange rate.
Latest RBI data showed that on a gross basis, the central bank sold $11.65 billion in the currency market in April while making purchases worth $8 billion.
In April, the rupee weakened to record closing lows versus the US dollar on multiple occasions as military confrontations between Iran and Israel sparked global risk aversion and led to dollar strength as 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 standing at (-) $16.3 billion at the end of April. This indicates that in April the RBI sold dollars for forward delivery.
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