RBI Sells $310 Million in October, INR Strengthens: Forex Insights

RBI $310M Forex Sale, INR Strengthens

The Reserve Bank of India (RBI) sold $310 million on the spot market for forex in October, as reported by the bank’s monthly Bulletin.

The central bank’s Bulletin stated that it bought $36.65 billion and sold $36.96 billion. In September, the central bank closed a net sale of $1.5 billion through the market for the spot.

The RBI Bulletin is a monthly publication providing information on the latest developments in the global and domestic economies but isn’t a representation of the views of the central bank. In accordance with Bulletin, On a trade-weighted basis, the nominal worth of the Indian Rupee increased by 1.6% in 2023-24 (April-December 8th of 2023).

In addition, when adjusted for inflation differentials, the INR appreciation is even higher at 4.5%. In the past two years, it has been 4.5% higher. The US dollar increased by 1.5% in comparison to a broad index of currencies.

Foreign currency reserves stood at $606.9 billion as of December 8 2023. This covers 10.4 months of projected imports in 2023-23 and 96% of the total outstanding external debt by the end of June 2023.

The reserves of foreign exchange in India were fourth among the top nations that hold foreign exchange reserves, growing by $28.4 billion during 2023-24 so far, Bulletin said.

Bulleting also stated that Indian rupees displayed the lowest level of volatility. Major currencies will decrease by 0.1% (m-o-m) compared to the US dollar by the end of November 2023.

The Indian Rupee appreciated (m-o-m) by a real effective exchange rate of 40 currencies (REER) on November 20, 2023, due to the decline of the Indian Rupee in nominal terms that more than offset positive relative cost/price differences.

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Daniel Martin
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