RBI's net outstanding forward dollar sales jump to $67.94 bln as of Dec 31
This story was originally published at 19:24 IST on 1 February 2025
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NEW DELHI – The Reserve Bank of India's net outstanding sales of dollar/rupee forward contracts climbed to a new high of $67.94 billion at the end of December, $9.09 billion higher from a month ago, data from the central bank showed.
The continued rise in the central bank's outstanding forward dollar sales--which had surged by $9.67 billion in November--coincides with the RBI's strong defence of the rupee through dollar sales in the offshore non-deliverable forwards market and continuous buy/sell swaps--buying dollars for immediate delivery and selling them for a forward date--to limit the strain on systemic liquidity.
In December, the RBI had not only rolled over its $32.40 billion worth of short forward positions maturing in one month, but added another $1.66 billion worth of short positions in this segment. However, in the one-three month segment, the RBI's short positions fell $2.45 billion from its November-end net short position of $26.70 billion.
The central bank added positions worth $9.88 billion in forwards maturing in more than three months to one-year. This was the first time in over 18 months that the RBI sold forward dollars with a maturity greater than three months.
The net position of the RBI's forward book is the difference between its outstanding gross purchases and gross sales of forward contracts. At the end of December, the central bank's gross long position in its forward book stood at $250 million, unchanged from a month ago.
The rupee fell 1.3% against the US dollar in December as the dollar index strengthened following Donald Trump's victory in the US presidential election. Weakening of the Chinese yuan and outflows from Indian financial markets also exerted pressure on the rupee. While the RBI intervened to prevent a sharp depreciation, it slightly loosened its grip as compared to earlier, according to dealers.
| DECEMBER | TOTAL | UP TO 1 MONTH | 1-3 MONTHS | 3 MONTHS-1 YEAR | MORE THAN 1 YEAR |
| Short positions | 68,188 | 34,060 | 24,253 | 9,875 | 0 |
| (+9,088) | (+1,660) | (-2,447) | (+9,875) | (0) | |
| Long positions | 250 | 250 | 0 | 0 | 0 |
| (0) | (+250) | (-250) | (0) | (0) | |
| Net (long-short) | -67,938 | -33,810 | -24,253 | -9,875 | 0 |
* Net change from the previous month in parentheses. All figures are in $ million.
End
US$1 = INR 86.61
Reported by Pratiksha
Edited by Tanima Banerjee
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