RBI became a net seller by selling USD 3.719 billion in June

in june last year reserve Bank of India The US was a net buyer of the currency. Central bank bought 18.633 billion USD Monthly on a net basis in the spot market.

Whereas in May this year, the central bank was the buyer of the greenback with net purchases of USD 2.001 billion. During the month, RBI bought USD 10.143 billion and sold USD 8.142 billion.

Further, in FY22, RBI recorded net purchases of USD 17.312 billion after buying USD 113.991 billion and selling at USD 96.679 billion in the spot market.

Meanwhile, in the futures dollar market, RBI’s outstanding net purchases in June this year stood at USD 30.856 billion as compared to USD 49.191 billion in the previous month.

In the bulletin, the central bank said, the RBI has been able to achieve its intervention objectives on persistent high volatility episodes of global spillovers driven by exchange market pressures.

In its study titled ‘Exchange Rate Volatility in Emerging Market Economies’, RBI said that the fall in foreign exchange reserves during the GFC was around $70 billion which declined to $17 billion during the outbreak of COVID-19. In the current Russia-Ukraine crisis and the Fed tightening episode, while reserves fall to $56 billion (as of July 29, 2022), the net decline is much smaller than when swap auctions led to foot selloffs in reserves ($20 billion) and valuation losses. is considered.

Further, the RBI reported that the size of the decline in foreign exchange reserves as a percentage of total foreign exchange reserves has come down from about 22% during the GFC to 6% during the Russia-Ukraine conflict and the Fed tightening episode.

“This implies that due to a general reduction in the volatility expectations of INR during the study period and due to accumulation and timely utilization of foreign exchange reserves, the Reserve Bank is unable to achieve its intervention objectives with progressively lower percentage decline in reserves. has been able to,” it said.

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