Millennium Post

After 5 months, RBI net $-buyer in Oct with $3.93-bn purchase

This is first time since April that the Indian central bank was a net buyer of dollars on a monthly basis.

In the late 22 May, US Federal Reserve Chief Ben Bernanke first mentioned 'tapering' to indicate a reduction in the US central bank's asset purchase scheme. This led to a knee-jerk reaction in
emerging market currencies.

The RBI bought $3.93 billion in October, buying $9.51 billion from the market and selling $5.58 billion during the month, RBI data released here on Tuesday said.

During October, the rupee appreciated by 1.75 per cent against the US dollar, gaining from 62.60 on 30 September to 61.50 on 31  October. In September, the Reserve Bank  was a net seller of the greenback amounting to $3.55 billion, as per Reserve Bank data. ‘Reserve Bank regularly buys and sells US dollars. In October, the rupee was stable and appreciating for most of the time. So there was not much intervention required by the Reserve BankI, and it resulted in a net purchase of dollars during the month,’ a private sector bank treasurer said. In April this year, the Reserve Bank bought $518 million worth of dollars. It purchased $3.3 billion while it sold $2.78 billion during the month.

During May and September period, the RBI remained net seller of the US dollar to help the rupee recover, after it fell over 25 per cent between May and August, analysts said.

In July, the Reserve Bank turned net seller and sold $5.98, which is the highest so far, during this fiscal.
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