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The net dollar sale in August stood at $7.69 billion, almost three times higher than in July, marking an aggressive intervention amid pressure on the domestic currency.
The rupee weakened by 1.6% against the US dollar in August.
The Reserve Bank of India (RBI) offloaded $7.7 billion in August to rein in exchange rate fluctuations and stem the rupee’s fall against the US dollar, according to data from the central bank’s latest bulletin.
The net dollar sale stood at $7.69 billion, almost three times higher than in July, marking an aggressive intervention amid pressure on the domestic currency. The data also showed that the RBI made no purchases of US dollars during July and August.
While the RBI maintains that it “does not target any particular level or band for the rupee-dollar exchange rate”, it has reiterated that interventions are made only to manage “excessive volatility” in the forex market.
The rupee weakened by 1.6% against the US dollar in August, and continued to depreciate in September amid global uncertainties, elevated trade tensions, and persistent foreign portfolio outflows.
What Does It Mean?
The RBI’s dollar sales indicate that the central bank is actively stepping in to smoothen sharp movements in the rupee, rather than letting market forces push it into a free fall. By selling dollars, the RBI supplies foreign currency into the market, increasing liquidity and helping stabilize the exchange rate.
This move also signals the central bank’s intent to maintain confidence among investors and importers amid global uncertainties. However, continued intervention comes at the cost of reducing India’s forex reserves, which the RBI must balance carefully to avoid depleting its buffer against external shocks.
Rupee-Dollar Exchange Rate
In the previous session on Monday, the rupee rose 9 paise to close at 87.93 (provisional) against the US dollar, supported by foreign fund inflows and lower crude oil prices. Positive sentiments in the domestic equity markets lent further support to the local unit, according to forex traders.
On Friday, the rupee closed at 88.02 against the US dollar.
“The Reserve Bank of India ensured that the rupee opened below 88… There was no specific development on the India-US trade front, while on the US-China front, the talks by government officials gave hope that US-China trade developments could be solved amicably,” Anil Kumar Bhansali, Executive Director, Finrex, said.
The forex markets remain closed on Tuesday and Wednesday.
However, stock exchanges on Tuesday held a special Muhurat trading session on Tuesday from 1.45 pm to 2.45 pm for Laxmi Pujan, according to notices by the BSE and the NSE.
Brent crude, the global oil benchmark, fell 0.36 per cent to $61.07 per barrel in futures trade.
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h…Read More
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h… Read More
October 21, 2025, 17:36 IST
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