The Reserve Bank of India (RBI) net sold USD 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 USD 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 Rs 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 US dollar strengthened by 7.8 per cent in 2022-23 (till November 30, 2022), she said. The rupee depreciated 6.9 per cent in the same period, she said, adding, it has performed better than most Asian peer currencies, including the Chinese Renminbi (10.6 per cent), Indonesian Rupiah (8.7 per cent), Philippine Peso (8.5 per cent), South Korean Won (8.1 per cent), Taiwanese Dollar (7.3 per cent) etc.