The Reserve Bank of India (RBI) sold $7.7 billion in August to curb exchange rate volatility and slow the rupee’s decline against the US dollar. According to the RBI’s latest bulletin, net dollar sales in August stood at $7.69 billion, nearly three times the figure from July. The central bank did not purchase any US dollars in July or August.
The RBI intervenes only during periods of extreme volatility and does not target a specific rupee-dollar rate. The rupee experienced a sharp fall in August and continued to weaken in September amid global uncertainties, rising trade tensions, and foreign portfolio investment outflows.
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On Monday, the rupee gained nine paise to close at 87.93 against the US dollar, supported by foreign investor buying, a decline in crude oil prices, and positive domestic stock market sentiment. The rupee had closed at 88.02 on Friday. The dollar index, tracking the US dollar against six major currencies, rose 0.1% to 98.53.
