RBI's Net Dollar Purchases Reach Record $43 Billion Amid FCNR(B) Inflows

Reserve Bank of India Reports Record Net Dollar Purchases

According to recent reported figures, the Reserve Bank of India's (RBI) net dollar purchases surged significantly to reach $43.3 billion in August 2026. This reported increase represents a 132% rise compared to the previous month, driven largely by inflows through concessional Foreign Currency Non-Resident Bank [FCNR(B)] swap facilities.

During the same period, the central bank's outstanding net forward short position crossed the $200 billion mark for the first time.

Breakdown of Foreign Exchange Transactions

Market data and reported central bank figures highlight several key transactional movements for August 2026:

• Gross Dollar Purchases: The RBI purchased $74.5 billion in dollars during August, marking a 93.9% increase from July's figures, contrasting with no dollar purchases recorded in August 2025.
• Gross Dollar Sales: Dollar sales rose to $31.2 billion in August, up 57.9% from July and significantly higher than the $7.7 billion recorded in August 2025.
• Forward Short Position: The outstanding net forward short position increased by $63.3 billion to reach a record $200.1 billion by the end of August.

Impact on Foreign Exchange Reserves and Liquidity

The central bank's dollar purchases reportedly assisted in absorbing funds mobilised by banks through FCNR(B) deposits from non-resident Indians (NRIs). Concurrently, ongoing pressure on the rupee prompted the central bank to conduct dollar sales and sell-buy swaps to manage domestic liquidity and support the currency.

Separately, India's foreign exchange reserves saw a reported decline, falling by $5.01 billion to $721.02 billion in the week ended October 16. This reduction was primarily led by a decrease in foreign currency assets, though partially offset by an increase in the value of gold reserves.

Practical Implications and Verification

• Market Observation: Analysts and market participants monitor these central bank figures to understand domestic liquidity and foreign exchange management strategies.
• Data Verification: Readers can verify official foreign exchange reserves, monetary policy statements, and statistical supplements directly through the official website of the Reserve Bank of India (RBI).