RBI's dollar buys up near 4 years! The Net Forex purchases of the Reserve Bank of India reached 14.4 billion US dollars in March

The monthly acquisitions of the Reserve Bank of India (RBI) in the foreign exchange market reached its highest level in March when the Central Bank Forex Swaps performed to ensure liquidity for the banking system.Between January and March, the RBI carried out three dollar-Rupien-Buy-Sell-Sell-Sell-Sell-Sell-Sell-Swaps with a combined value of $ 25 billion. These swaps concerned the RBI, which did dollars and made rupees available in return, which increased the local currency liquidity in the system.Two of these auctions, each with USD 10 billion, were completed in March.The RBI made forex operations and bought $ 27.2 billion in March, in which the Rupie estimated $ 2.3% compared to the dollar.

Liquidity boost

The outstanding net forward sales position was $ 84.4 billion until March end, which is due to February of $ 88.7 billion in accordance with the RBI data. The Central Bank's Forward Book shows accumulated net dollars shorts that either require rollover or liquidity injection to prevent drainage from the banking system, such as economists.According to data published on Wednesday in the RBI monthly bulletin, the central bank's net runs in March in March amounted to 14.4 billion US dollars in contrast to net sales of $ 1.6 billion in the previous month. According to an ET report, this is the highest net acquisition since June 2021.Read also | Big hit for Indians in the USA! How Donald Trump's steps to contain migration, tax transfers in India can cost billions of dollars“The net number for March would have been negative (net sale) if the RBI had not carried out no purchase sales exchange worth 20 billion USD,” said Gaura sen Guppa, chief economist at IDFC First Bank.“The intervention of the RBI into the foreign exchange market has an impact on the liquidity of the banking system. Note that the central bank focuses on the transfer of interest rate cuts.When ripening short positions, the RBI dollar must replace rupees and influence the INR liquidity. The sales of dollars will also influence the RBI Forex Reserves, which currently decreased at $ 704.9 billion at 691 billion USD at the end of September 2023.