MUMBAI: RBI’s net dollar purchases surged 132% to $43.3 billion in Aug 2026, driven by inflows through its concessional FCNR(B) swap facility, while its outstanding net forward short position crossed $200 billion for the first time.RBI bought $74.5 billion in dollars during the month, up 93.9% from $38.4 billion in July. It made no dollar purchases in Aug 2025, when it was defending the rupee amid foreign portfolio outflows. Dollar sales rose 57.9% month-on-month to $31.2 billion from $19.8 billion in July and were 305.6% higher than the $7.7 billion sold in Aug 2025.
Surges 132% In Aug Driven By FCNR Flows,Forward Liabilities Rise Too, Cross $200Bn
Net purchases were 132% higher than the $18.7 billion recorded in July and contrasted with net sales of $7.7 billion in Aug 2025. Gross transactions across onshore and offshore over-the-counter markets exceeded $105.7 billion. RBI’s dollar purchases helped absorb the $127 billion mobilised by banks through FCNR(B) deposits from NRIs.However, pressure on the rupee prompted the central bank to sell dollars to support the currency. Its dollar sales of $31.2 billion in Aug represented around a quarter of the amount mobilised through FCNR(B) deposits, though the two figures cover different types of transactions and periods of currency management.India’s foreign exchange reserves fell by $5.01 billion to $721.02 billion in the week ended Oct 16, down $64.7 billion from their all-time high of $785.71 billion in the week ended Sept 4, as pressure on the rupee continued. Foreign currency assets, the largest component of reserves, declined by $5.76 billion during the latest week. The fall was partly offset by a $706 million increase in the value of gold reserves.RBI’s concessional dollar-rupee swap facility allowed banks to exchange dollar deposits raised from NRIs for three to five years for rupees, while securing forward hedges from the central bank. The deposit mobilisation window closed at the end of Aug, prompting banks to surrender the dollar proceeds to RBI.The central bank also stepped up dollar sales and conducted offsetting sellbuy swaps to manage the rupee and the liquidity injected through its purchases. Its outstanding net forward short position rose by $63.3 billion, or 46.3%, in a month to a record $200.1 billion at end-Aug, compared with $136.8 billion in July and $53.4 billion a year earlier.
