Reserve Bank of India completed $43.3 billion worth of dollar purchases in August 2026, a 132% increase from July’s $18.7 billion, largely through its FCNR(B) swap facility. The swap channel, closed at the end of August, allowed banks to exchange NRI‑raised dollar deposits for rupees and secure forward hedges, pulling $127 billion of foreign‑currency deposits into the central bank.
The same month, RBI sold $31.2 billion of dollars, a 57.9% rise from July’s $19.8 billion, to counter rupee pressure. Net sales of $31.2 billion eclipsed the $7.7 billion sold in August 2025, when the bank had taken no purchase position.
RBI’s net forward short position climbed to $200.1 billion at the end of August, up 46.3% from $136.8 billion in July and a leap of $63.3 billion over the same period a year earlier. This figure represents the first time the short position has crossed the $200 billion threshold.
Foreign‑exchange reserves dipped by $5.01 billion to $721.02 billion in the week ending 16 October, falling $64.7 billion from the all‑time high of $785.71 billion recorded on 4 September. While foreign‑currency assets fell $5.76 billion, gold holdings rose by $706 million, partially offsetting the decline.
Analysts say the RBI’s aggressive buying and selling of dollars will be closely watched as the government pursues a tighter monetary stance. Market participants expect the central bank to increase forward‑sale volumes in September to shore up the rupee amid ongoing capital‑outflow concerns.