Reserve Bank of India Records $43.26 Billion Net Dollar Purchases

The Reserve Bank of India recorded net dollar purchases of $43.26 billion in August 2026, a significant increase from the $18.65 billion purchased in July. This surge resulted from the closure of a concessional swap facility for external commercial borrowings, overseas foreign currency borrowings, and FCNR(B) deposits, which led banks to route mobilized dollars back to the central bank.

During the month of August, the central bank bought $74.47 billion and sold $31.21 billion. This activity occurred alongside a record increase in the RBI's outstanding net short position in the forward market, which rose to $200.06 billion from $136.77 billion in July.

Despite the aggressive purchases, the central bank continued selling dollars to support the rupee against ongoing currency pressure. These fluctuations contributed to a decline in India's total foreign exchange reserves, which fell to $721.02 billion in the week ending October 16, down from a peak of $785.71 billion reached in early September.