Daijiworld Media Network - Mumbai
Mumbai, Oct 23: The Reserve Bank of India (RBI) recorded its highest-ever monthly net dollar purchases in August, buying a net $43.26 billion from the foreign exchange market as funds mobilised under its concessional swap facility flowed back to the central bank, according to data released on Friday.
The RBI’s monthly bulletin showed that the central bank purchased $74.47 billion and sold $31.21 billion during August, resulting in net purchases of $43.26 billion. The figure was more than double the net purchase of $18.65 billion recorded in July.
The sharp increase was largely driven by dollars raised by banks under the RBI’s concessional swap window for FCNR(B) deposits, external commercial borrowings (ECBs) and overseas foreign currency borrowings. Funds mobilised under the programme were routed back to the central bank through the swap facility.
The RBI had advanced the closure of the facility to August 31 from the earlier deadline of September 30 after banks mobilised $52.3 billion under the programme by August 14.
The latest data also points to a significant shift in the RBI’s foreign exchange operations. The central bank was a net seller of dollars in 10 of the 17 months through August and sold dollars continuously from August to December 2025. After pausing net sales in January and February 2026, it resumed selling in March.
The trend reversed in the current financial year, FY27. Following net dollar sales in April and May, the RBI turned a net buyer in June and significantly increased its purchases in July and August.
Consequently, cumulative net dollar purchases in FY27 rose to $47.43 billion by the end of August, compared with $4.17 billion at the end of July. The increase nearly offset the $53.13 billion in net dollar sales recorded during the whole of FY26.
The central bank’s forward market book also expanded substantially. Its outstanding net short dollar position in the forward market surged to a record $200.06 billion at the end of August, from $136.77 billion in July, marking an increase of around $63 billion in a month.
Short-dollar positions with maturities of less than one year rose to $55.15 billion from $47.66 billion, while positions with maturities exceeding one year nearly doubled to $176.57 billion from $91.54 billion.
At the same time, the RBI’s long dollar positions increased sharply to $31.66 billion at the end of August from $2.43 billion a month earlier.
After adjusting for these long positions, the central bank’s net short position in contracts maturing within one year declined to around $23.5 billion in August from $45.2 billion in July, as the relevant positions were due to mature within one month.