First in FY14: Reserve Bank of India didn't buy dollars in Feb; sold $530 million

Apr 11 2014, 19:11 IST
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The data for the final month of March is awaited. (Reuters) The data for the final month of March is awaited. (Reuters)
SummaryFor the first time in 11 months of 2013-14 fiscal, the Reserve Bank did not purchase any dollars at all in February from the market, but sold USD 530 million.

For the first time in 11 months of 2013-14 fiscal, the Reserve Bank did not purchase any dollars at all in February from the market, but sold USD 530 million.

In January, the central bank was a net seller of USD 1,929 million when it purchased USD 375 million and sold USD 2,304 million, but kept completely away from buying the greenback in February, which was a first in FY14, as per the RBI data.

The data for the final month of March is awaited.

Between October and December of 2013, the central bank net purchased USD 17.498 billion from the market.

Starting May until September, RBI was net seller of the US currency on a monthly basis to help the rupee which plunged after former US Fed chairman Ben Bernanke had on May 24 last hinted at withdrawing its easy money policy.

The rupee depreciated nearly 30 per cent between May and August. It touched a life-time low of 68.85 during intra-day trades on August 28, 2013.

In FY14, the forex reserves crossed USD 300 billion mark which was highest since December 2011.

For the week to March 28, 2014, the reserves rose by whopping USD 5.038 billion to USD 303.673 billion.

DBS Bank in a recent report had said the central bank was likely to remain focused on building foreign reserves in the months ahead, with the present phase of spare capacity and weak demand conditions lowering the inflationary threats.

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