The Reserve Bank continued to remain a net buyer of the US currency in March after it bought a net of $3.53 billion from the spot market to contain a rising rupee. In the reporting month, the central bank had bought $5.02 billion while it sold $1.486 billion in the spot market, according to the central bank data.
The Reserve Bank intervenes in the forex market to curb volatility in the currency market. Though this time it was to contain the rupee, which has been the best performing major economy units, the intervention did not yield the desired impact as the rupee has been scaling new highs for many months and is trading around 64.15-64.50 range for long now.
In February, the RBI was a net purchaser of dollars after it bought $2.2 billion and against selling $1.01 billion in the spot market. In March 2016, RBI had net bought $4.686 billion, as it bought $8.03 billion and sold $3.34 billion in the spot market.
Watch this also:
In fiscal 2016, RBI was net purchaser of $10.209 billion when it had bought $63.299 billion and sold $53.090 billion, while in fiscal 2015, it purchased a net of $54.837 billion.
In the forward dollar market, the outstanding net forward purchase at end-March was $10.835 billion, according to the RBI data. Net forward purchase at February end was $2.84 billion. RBI releases data on sale or purchase of dollars from the spot market and forward market at a lag of two months.