RBI Sells $9.2 Billion in October: Highest Monthly Sale Since 2022

In October 2024, the Reserve Bank of India (RBI) net sold $9.2 billion, marking the highest monthly sale of foreign currency since September 2022, when it sold $10.3 billion. As per the RBI’s monthly bulletin, it purchased $27.5 billion and sold $36.7 billion during the month.

Rupee Breaches 84 Per Dollar

On October 11, the rupee weakened past the 84-per-dollar mark, prompting aggressive intervention by the RBI. According to a foreign exchange dealer from a state-owned bank, the central bank acted decisively at the 83.98 level to curb market volatility. The rupee depreciated by 0.34% during October and further by 1.44% after October 11, crossing the 85-per-dollar mark.

Impact of US Elections and Stronger Dollar

Significant outflows toward the end of October, attributed to the US elections and a strengthening dollar, added to market pressure. Another dealer noted that the RBI actively intervened at all levels to manage the volatility.

RBI’s Currency Activity in 2024

• First Half of FY24 (April-September): The RBI was a net buyer of $8.52 billion.
• Year-to-Date (January-October): The RBI net bought $23.07 billion.
• September 2024: The central bank net bought $9.6 billion, purchasing $28.9 billion and selling $19.2 billion.

Net Seller in 4 Months of FY24

In the current financial year, the RBI has been a net seller of dollars in April, June, August, and October.

Forward Sales Position

By October 2024, the RBI’s net outstanding forward sales increased to $49.18 billion, up from $14.58 billion in September.

Previous Financial Year Summary

During FY23, the RBI net bought $41.27 billion, highlighting a significant shift in its dollar trade strategy this year.

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