RBI Net Dollar Purchases Hit Record $43.26 Billion in August
The Reserve Bank of India net purchased a record $43.26 billion in August 2026, more than double the $18.65 billion net purchase recorded in July, according to data released in the central bank’s monthly bulletin. The surge reflects funds routed back through its concessional swap window as banks returned foreign currency mobilised under special deposit and borrowing programmes.
RBI Net Purchases Reach 43.26 Billion Dollars
During August, the central bank purchased $74.47 billion while selling $31.21 billion in the foreign exchange market, business-standard.com reported. This spot market activity drove the net purchase figure to $43.26 billion. The sharp inflow of dollars coincided with the return of funds mobilised under the RBI’s concessional swap facility for FCNR(B) deposits, external commercial borrowings, and overseas foreign currency borrowings.
The central bank brought forward the facility’s closure to August 31 from September 30. Banks had already mobilised $52.3 billion under the programme by August 14. As these funds flowed back to the central bank through the swap window, spot purchases expanded rapidly.
Central Bank Shifts to Net Dollar Buying
The August purchases mark a sharp reversal in the central bank’s foreign exchange strategy. The institution had acted as a net dollar seller in 10 of the 17 months leading up to August. Sales ran continuously from August 2025 through December 2025, paused through January and February 2026, and resumed in March.
The trend shifted in fiscal year 2027. Following net dollar sales in April and May, the central bank turned a net buyer in June before accelerating purchases in July and August. Cumulative net dollar buying for the current fiscal year reached $47.43 billion by the end of August, jumping from $4.17 billion at the end of July and nearly offsetting the $53.13 billion of net selling across the entire 2026 fiscal year.
Expansion in the Forward Market
Alongside spot market intervention, the central bank’s outstanding net short dollar position in the forward market surged to a record $200.06 billion by the end of August. This compares to $136.77 billion at the end of July, representing a rise of about $63 billion in a single month.
Short positions with a maturity of under one year climbed to $55.15 billion in August from $47.66 billion in July. Positions maturing in more than one year nearly doubled, moving from $91.54 billion to $176.57 billion. At the same time, long dollar positions rose to $31.66 billion from $2.43 billion, with all long contracts maturing within one month. After adjusting for these long positions, the net short position in contracts maturing within one year dropped to approximately $23.5 billion in August from $45.2 billion in July.
Rupee Real Effective Exchange Rate Rises in September
The real effective exchange rate of the Indian rupee stood at 89.35 in September, shifting from 88.72 in August. The REER adjusts the nominal effective exchange rate to account for inflation differentials between India and its trading partners. A reading above 100 indicates an appreciation of the currency relative to the base year, which can affect the global competitiveness of Indian exports.