RBI Net Forex Purchase Jumps to $7.41 Billion in February Amid Rupee Recovery
Central bank steps up dollar buying as rupee gains briefly; global tensions and capital outflows pose fresh risks
New Delhi: The Reserve Bank of India (RBI) recorded a sharp rise in net foreign exchange purchases, buying $7.41 billion in February, according to its latest monthly bulletin released on Thursday. This marks the second consecutive month of net dollar purchases, signaling continued intervention in currency markets.
During February, the RBI purchased $21.4 billion and sold $13.99 billion, significantly higher than January’s net purchase of $2.5 billion. The central bank’s net outstanding forward dollar sales also increased to $77.67 billion, up from $67.77 billion in the previous month.
Rupee Sees Temporary Recovery
The Indian rupee appreciated by 1% against the US dollar in February, marking its first monthly gain in 10 months. The recovery followed optimism around a trade agreement between India and the United States.
However, the rebound proved short-lived. Escalating geopolitical tensions in Middle East disrupted global energy markets, triggering record foreign portfolio outflows from Indian markets.
Rupee Hits Record Low in March
The currency later plunged to an all-time low of 95.21 per dollar in late March before stabilizing around 93.50, supported by RBI measures aimed at curbing speculative trading.
Growth Outlook Remains Resilient
Despite global uncertainties, the RBI projects India’s real GDP growth at 6.9% for 2026-27, driven by strong domestic consumption and robust investment activity.
At the global level, the International Monetary Fund (IMF) has revised its 2026 growth forecast slightly upward to 3.3%, citing resilience in sectors like technology and artificial intelligence, particularly in North America and parts of Asia.
Global Risks Continue to Loom
The RBI bulletin warns that persistent geopolitical tensions, especially in West Asia, could weigh heavily on global trade and growth. The ongoing conflict has disrupted energy supply chains, with partial closures of the Strait of Hormuz significantly impacting Gulf trade routes.
Additionally, widening fiscal imbalances in major economies may lead to higher interest rates and tighter global financial conditions, increasing the risk of capital outflows from emerging market economies like India.
