The Reserve Bank of India (RBI) net sold $10.02 billion in the foreign exchange market in December, according to data released in its latest monthly bulletin, highlighting the central bank’s aggressive intervention to curb volatility in the Indian rupee.
During December, the RBI purchased $18.33 billion while selling $28.35 billion, resulting in a net sale of just over $10 billion. This follows a net sale of $9.7 billion in November, reflecting sustained efforts by the central bank to stabilise the domestic currency amid global uncertainties.
The Indian rupee came under significant pressure during the month, slipping to a record low of 91.0750 on December 16. The decline was largely driven by concerns over a prolonged trade stalemate with the United States and persistent foreign capital outflows, which weighed heavily on investor sentiment.
The currency depreciated nearly 0.4% in December and extended its fall beyond the 91 mark in January. However, it staged a recovery in early February following the announcement of a U.S.-India trade deal, which improved market confidence and supported the rupee.
Data from the bulletin also showed that the RBI’s net outstanding forward dollar sales stood at $62.3 billion at the end of December, compared to $66.04 billion at the end of November. The central bank actively intervenes in both spot and forward markets to smooth excessive exchange rate fluctuations and prevent disorderly movements in the currency.
On Friday, the rupee closed at 90.9825, marking its steepest weekly decline in a month amid subdued global risk appetite.
The continued intervention underscores the RBI’s commitment to maintaining currency stability at a time when emerging market currencies face heightened global headwinds.
