The Reserve Bank of India (RBI) recorded net dollar sales of $21.7 billion in the first half of FY26, a significant drop from the $85.11 billion sold during the same period in FY25. Despite being a net seller through most months—with the exception of May—the scale of intervention declined sharply compared to last year. The largest monthly sales were $7.9 billion in September and $7.6 billion in August.
In FY25, the RBI had reported total net sales of $34.5 billion, the highest since the 2008–09 global financial crisis, when sales reached $34.9 billion.
Forward Market Position & Exchange Rate Indicators
The RBI’s net short dollar forward position rose by $6 billion in September, reversing a six-month downward streak. The position increased from $53 billion in August to $59 billion, reflecting renewed hedging activity.
Meanwhile, the Real Effective Exchange Rate (REER)—which adjusts for inflation differentials—remained steady at 97.47 in October, compared with 97.4 in September. This follows earlier fluctuations, including a temporary rise to 98.8 in August.
Historical Movement of the Rupee
The REER had climbed from 103.66 in January 2024 to 108.14 in November 2024, before easing for five straight months. REER values above 100 typically indicate an appreciation of the rupee in real terms.
The RBI’s moderated forex intervention in the first half of FY26 highlights a shift towards lower volatility management amid a more stable rupee environment.
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