Mumbai: After a gap of five months, the Reserve Bank of India (RBI) was a net buyer of dollars in October after it bought nearly USD 4 billion worth greenback. This is first time since April that the Indian central bank was a net buyer of dollars on a monthly basis.
In late May 22, 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 such as Indian rupee.
The RBI bought USD 3.93 billion in October, buying USD 9.51 billion from the market and selling USD 5.58 billion during the month, RBI data released here today said. During October, the rupee appreciated by 1.75 per cent against the US dollar, gaining from 62.60 on September 30 to 61.50 on October 31.
In September, the RBI was a net seller of the greenback amounting to USD 3.55 billion, as per RBI data. “RBI 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 RBI, and it resulted in a net purchase of dollars during the month,” a private sector bank treasurer said.
In April this year, the RBI bought USD 518 million worth of dollars. It purchased USD 3.3 billion while it sold USD 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.
The rupee touched its all-time intra-day low of 68.85 on August 28. It closed at 61.04 versus the dollar today. In July, the RBI turned net seller and sold USD 5.98, which is the highest so far, during this fiscal.
