RBI's Strategic Forex Moves in January

In a significant financial maneuver, the Reserve Bank of India (RBI) reported net dollar sales exceeding $11 billion in January, marking a pivotal moment in the country's forex market dynamics. The central bank's activities included purchasing $49.2 billion and selling $60.3 billion, showcasing a strategic approach to managing the nation's currency stability.

Comparative Analysis with Previous Months

This figure, although substantial, represents a decrease from December 2024's net sales of $15 billion, where the RBI bought $54 billion and sold $69 billion. The cumulative net sales from April 2024 to January 2025 reached $47.2 billion, effectively withdrawing nearly Rs 4 lakh crore of liquidity from the system. Notably, November 2024 witnessed the highest monthly intervention with net sales of $20 billion.

Impact on the Rupee and Forward Sales

The rupee experienced a 1.1% decline against the dollar in January, fluctuating between 85.62 and 86.65, and closed at 86.44 per dollar on the reported Wednesday. The RBI's net outstanding forward sales also saw an increase to $77.5 billion at the end of January, up from $67.9 billion in December. These interventions in both the spot and forwards markets are part of the RBI's efforts to curb exchange-rate volatility and ensure economic stability.