RBI sells $3.6 billion in April to stabilize rupee amid global trade tensions
In April, the Reserve Bank of India net sold $3.6 billion amidst equity market volatility triggered by Donald Trump's tariff deadlines. This intervention aimed to stabilize the rupee, which appreciated 1.2% to close at 84.49 per dollar, despite tr...
By ET Bureau |
Reuters
The currency touched a peak of 85.80/$1 earlier in the day but gave up its gains due to month end dollar demand, traders said.
Mumbai: The Reserve Bank of India (RBI) net sold $3.6 billion in April, a month that saw both an initial precipitate decline in equity gauges and a backloaded recovery, indicating that a part of the currency stockpile was used to curb excessive volatility in the rupee after Donald Trump's tariff deadlines roiled emerging market assets worldwide.
The June monthly bulletin published Wednesday also showed that in the preceding month, RBI had purchased $14.4 billion in March, the highest in four years, as it carried out $10 billion forex swaps to infuse liquidity into the banking system. Through March, the equity index also climbed more than 5%.
The rupee had appreciated 1.2% in April and closed at 84.49 per dollar on the last trading day of the Month, where the rupee grappled with US trade policy tensions, along with tensions on the India-Pakistan border. On a gross basis, RBI purchased $8 billion and sold $11.6 billion in April.
The real effective exchange rate (REER) - the value of rupee against an average of six currencies - was steady at 99 in May, bulletin data showed.
On Wednesday, the rupee closed slightly weaker on Wednesday at 86.07 against the US dollar, about 10 paise weaker from its close of 85.97/$1, LSEG data showed. The currency touched a peak of 85.80/$1 earlier in the day but gave up its gains due to month end dollar demand, traders said.
