Business · India Bureau
RBI returns to net dollar purchases in June on strong inflows
The Reserve Bank of India became a net buyer of dollars for the first time since February, purchasing $561 million during June as foreign capital flows strengthened. The central bank also reduced its outstanding net short position in the forward market during the month.
LSN India ·
The RBI's shift to net dollar purchases marks a significant reversal in its foreign exchange management strategy after four months of net selling. The $561 million purchase in June reflects robust foreign inflows into Indian markets, signaling renewed investor confidence in the domestic economy and financial assets.
The central bank's forward market position also improved during the period, with its outstanding net short position declining as the rupee stabilized amid improving external sector dynamics. The RBI has been actively managing the rupee's volatility through both spot market interventions and forward market operations.
The June data comes as India continues to attract foreign direct investment and portfolio inflows despite global economic uncertainties. The RBI's monthly bulletin indicated that the consistent management of forex reserves and market interventions have supported rupee stability while building the country's external buffers.
The return to net dollar purchases suggests the RBI may be taking advantage of stronger inflows to bolster India's foreign exchange reserves, which serve as a critical cushion for the economy against external shocks and support the country's import cover capacity.