1. Home >
  2. Export Import News >
  3. Foreign Exchange >
  4. RBI sells more dollars in forwards during September >
  5. RBI sells more dollars in forwards during September

Online Export Import Data Search

Complete Training Video : Click Here

RBI sells more dollars in forwards during September.

Date: 15-11-2018
Subject: RBI sells more dollars in forwards during September
The Reserve Bank is intervening in the currency market without hurting the reserves and domestic liquidity. It has gone slow on its spot foreign exchange market intervention in September. 

It sold only $ 1 billion in spot market, but sold $7 billion in forward, according to the latest date released by the central bank. In comparison it sold $ 6 billion in spot and $ 5 billion in forward in August.

The Reserve Bank has been aggressively selling dollars in the spot as well as forward markets since January this year. This is because the rupee has been losing value as foreign investors started pulling out investments from emerging markets including India following the rate hike since last December. 

The September intervention policy is significant because the rupee had touched a new low touching close to Rs 75 to the dollar as rising crude prices too put pressure on the currency. Also, the domestic markets faced tight liquidity conditions due to the problems faced by the NBFCs to repay their short term liabilities. “The central bank’s policy to intervene more in forward than in spot at such times is a prudent measure” said Soumyajit Neogi, Associate director at India Ratings. “It manages the value of the currency without hurting the reserves as well as domestic liquidity” .

Whenever a central bank intervenes in the spot market, there is a direct impact on both the level of domestic liquidity as well as the foreign currency reserves. This is because the central bank draws on its reserves and sells them in exchange of rupee liquidity, when it sells dollar in the spot market. But in a forward contract there is no physical transfer of currency for a pre-decided period. If need be these contracts can be rolled over and avoid use of physical currency. 

The combined spot and forward dollar intervention in the first half of the fiscal is over $30 billion. India’s foreign exchange reserves have dipped by $30 billion so far till early November. Any sharp drawdown of reserves could put pressure on other external sector indicators such as import cover of reserves and the ratio of short-term debt to reserves. 

But there estimates that the Reserve Bank is likely to have stepped up its spot intervention in October. “Headline forex reserve data for the week ended 12 October indicates that the Reserve Bank of India intervened heavily in the spot market” said a report by Standard Chartered Bank. ” We estimate the spot intervention for this week at $5.9bn, the heaviest in the past decade”. 

Source: economictimes.indiatimes.com

Get Sample Now

Which service(s) are you interested in?
 Export Data
 Import Data
 Exim Help

What is New?

Date: 18-10-2019
Notification No. 77/2019- Customs (N.T.)
Road from Nongjri (Barapunji), East Khasi Hills District, Meghalaya, to Kalairag (Bangladesh) between BP No. 1251/11-S-12-S

Date: 18-10-2019
Notification No.25/2015-2020
Incorporation of new provision in the Foreign Trade Policy 2015-20 about cases referred to National Company Law Tribunal (NCLT).

Date: 18-10-2019
PUBLIC NOTICE NO. 39/2015-2020
Incorporation of new provision in the Handbook of Procedure 2015-20 about cases referred to National Company Law Tribunal (NCLT).

Date: 17-10-2019
Notification No.76/2019 - Customs (N.T.)
Exchange Rates Notification No.76/2019-Custom (NT) dated 17.10.2019

Date: 16-10-2019
Notification No. 57/2019-Customs (N.T./CAA/DRI)
Appointment of CAA by DGRI - reg.

Date: 15-10-2019
Seeks to impose anti-dumping duty on imports of Flat rolled product of steel, plated or coated with alloy of Aluminium and Zinc originating in, or exported from China PR, Vietnam and Korea RP.

Date: 15-10-2019
Notification No. 75/2019-CUSTOMS (N.T.)
Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold and Silver- Reg

Date: 14-10-2019
Notification No. 56/2019-Customs (N.T./CAA/DRI)
Appointment of CAA by DGRI - reg.

Date: 11-10-2019
No. 04/2019- Customs
Clarification regarding inclusion of cesses, surcharge, duties, etc. levied and collected under legislations other than Customs Act, 1962, Customs Tariff Act, 1975 or Central Excise Act, 1944 in Brand Rate of duty drawback

Date: 11-10-2019
Notification No. 23/2015-2020
Amendment in Import Policy Condition of Urea under Exim Code 31021000 in the ITC (HS) 2017, Schedule-I (Import Policy)- regd.

Exim Guru Copyright © 1999-2019 Exim Guru. All Rights Reserved.
The information presented on the site is believed to be accurate. However, InfodriveIndia takes no legal responsibilities for the validity of the information.
Please read our Terms of Use and Privacy Policy before you use this Export Import Data Directory.


C/o Infodrive India
E-2, 3rd Floor, Kalkaji Main Road
New Delhi - 110019, India
Phone : 011 - 40703001