The Reserve Bank of India (RBI) sold $23.11 billion on a gross basis in August as it looked to stem the rupee's fall against the US dollar, data released on October 17 by the central bank showed.
This follows a record-breaking July, where the RBI sold a massive $38.77 billion - again, on a gross basis - to defend the exchange rate in a month when it crossed the 80-per-dollar mark for the first time.
On a net basis, the RBI had sold $19.05 billion in July, with data released today showing this number fell to $4.25 billion in August.
Despite the RBI intervening heavily in the foreign exchange market in recent months, the Indian rupee weakened by around 1.2 percent over July-August.
Since then, the Indian currency has weakened even more and hit new record lows, closing at 82.3 per dollar on October 17. This has increased pressure on the government, with Finance Minister Nirmala Sitharaman mounting a defence over the weekend by arguing it was not the rupee that had weakened but the US dollar that had strengthened.
So far in 2022, the rupee has depreciated by just under 10 percent against the greenback.
Apart from intervening in the spot market, the RBI was also active in the forward market, with its outstanding net forward book declining by $1.86 billion in August to stand at $20.16 billion as on August 31.
The RBI's outstanding net forward book stood at $65.79 billion at the start of FY23.
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