The Reserve Bank of India sold a
net $8.94 billion in the foreign exchange market in April, data
released on Monday showed, as it stepped in to support the rupee
that had plunged to record lows amid the U.S.-Iran war.
The RBI said in its monthly bulletin that it purchased
$16.23 billion and sold $25.17 billion in April. In March, the
central bank had sold a net $9.8 billion.
The volume of the central bank’s gold holdings, meanwhile,
was unchanged during May at 880.52 metric tonnes, even as its
value declined from $120.23 billion in late April to $112.6
billion last month, the data showed.
The Indian rupee had slumped to a record low of
96.96 per dollar last month as surging oil prices and higher
global bond yields pummeled the South Asian unit. The currency
was consequently shored up by firm RBI intervention over
multiple trading sessions.
The RBI’s net outstanding forward dollar sales stood at
$95.30 billion as of end-April, compared with $103.06 billion as
of end-March.
While a media report earlier in the month had suggested that
the central bank may have sold part of its gold reserves, this
was subsequently rebutted by the RBI. The physical stock of the
precious metal has remained unchanged at 880.52 tonnes since
early April, the data showed.
The backdrop for the rupee has improved, following a salvo
of policy measures announced earlier this month to shore up
dollar inflows into the world’s fourth-largest economy as well
as a sharp retreat in oil prices on signs of progress in
U.S.-Iran negotiations.
On Monday, the rupee closed down 0.4% at 94.6775 per dollar.
Latest data show that India’s foreign exchange reserves declined
to a more than one-year low of $671.6 billion, reflecting the
central bank’s efforts to defend the embattled currency.