RBI sells $33.42 billion in April-September FY23 to curb rupee volatility
The Hindu
The exchange rate of the Indian Rupee (INR) against the greenback hit a record high of ₹83.20 per dollar on October 20, 2022
The Reserve Bank of India (RBI) net sold $33.42 billion in the foreign exchange market in the first six months of current fiscal to defend the rupee from excessive volatility.
The Central Bank closely monitors the foreign exchange markets and intervenes only to maintain orderly market conditions by containing excessive volatility in the exchange rate, without reference to any pre-determined target level or band.
"During the financial year, the RBI’s operations have resulted in net sales of $33.42 billion till September 2022 (settlement basis)," Finance Minister Nirmala Sitharaman said in a reply to the Lok Sabha.
The exchange rate of the Indian Rupee (INR) against the greenback hit a record high of ₹83.20 per dollar on October 20, 2022. The value of rupee is market-determined.
As global spillovers from geopolitical tensions and aggressive monetary policy tightening across the world intensified alongside a surge in crude oil prices, the U.S. dollar strengthened by 7.8% in 2022-23 (till November 30, 2022), she said.
The rupee depreciated 6.9% in the same period, she said, adding, it has performed better than most Asian peer currencies, including the Chinese Renminbi (10.6%), Indonesian Rupiah (8.7%), Philippine Peso (8.5%), South Korean Won (8.1%), Taiwanese Dollar (7.3%) etc.
The RBI announced various measures in the recent period to expand sources of forex funding to mitigate exchange rate volatility, including hike in the external commercial borrowing limit to $1.5 billion and raising the all-in-cost ceiling by 100 basis points in select cases up to December 31, 2022, she said.
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