India’s foreign exchange reserves stood at $354.3 billion as of June 12, rising for the third straight week, data from the Reserve Bank of India showed.
Forex reserves rose by $1.6 billion in the week ended June 12 and were up $40.7 billion from a year ago. The accretion indicates that the RBI has been a buyer of dollars in more instances than it had sold dollars in the market.
In its June bulletin released early this month, RBI said it has bought $5.4 billion from the spot forex market in April, but its forward market position has dwindled to $5.17 billion from $8.32 billion in March. The fall in the RBI’s outstanding forward dollar position indicates that the central bank may have taken delivery of earlier dollar purchases.
The RBI has been a net buyer of dollars as inflows have been robust until April.
Since May, foreign institutional investors have turned net sellers of bonds and equities. Consequently, the central bank’s interventions have reduced in frequency from before, dealers said.
Barring the inflow of $1.4 billion into Vodafone’s rupee bond issue, FIIs have stayed sellers of bonds. However, dollar inflows could trickle in going ahead as the US Federal Reserve indicated that its rate hikes would be gradual on Wednesday. After the Fed’s statement, the rupee also bounced back from a 21-month low and ended at 63.56/$ on Friday.