RBI net buys $1.86 billion in spot forex market for second month in May

Mumbai: The Reserve Bank became net purchaser of dollars for the second consecutive month in May this fiscal buying USD 1.786 billion from the spot market. During the month, the apex bank bought USD 7.981 billion from the market while it sold USD 6.195 billion, the RBI monthly data showed. In April, RBI purchased USD7.85 billion and sold USD 1.980 billion, thereby became a net buyer of USD 5.870 billion. In May last year, RBI net sold USD 107 million in the market.

In the entire FY14, RBI net purchased USD 8.992 billion. It had bought USD 52.394 billion and sold USD 43.402 billion in the previous fiscal. The central bank's intervention in the foreign exchange market is not described as increasing the forex cover but to curb volatility in the currency market. In the forwards dollar market, the outstanding net forward sales at the end of May stood at USD 11.463 billion as against sales of USD 32.063 billion in the previous month.