 "RBI, Reserve Bank of India")
The RBI’s gold stock remained unchanged at 880.52 metric tonnes as of the week ended July 31 | (Photo: Reuters)
The Reserve Bank of India (RBI) net bought $561 million in June, against a net sale of $6.10 billion in May, according to the central bank’s monthly bulletin. This was the RBI’s first net purchase since February, after it remained a net seller for three consecutive months as it intervened in the foreign exchange market amid the West Asia crisis.
The central bank bought $30.89 billion, while it sold $30.33 billion during the month. The rupee had appreciated by 0.36 per cent against the dollar in June.
In June, the Reserve Bank of India and the government announced a series of measures to attract foreign capital. The RBI expanded the Fully Accessible Route (FAR) to include 15-year, 30-year and 40-year government securities, allowing foreign investors to invest in these securities without the existing maturity restrictions. It also introduced a concessional foreign exchange swap facility for eligible external commercial borrowings and allowed banks to raise fresh three-to-five-year FCNR(B) deposits, with the RBI bearing the full hedging cost.
Separately, the government exempted foreign portfolio investors from tax on interest income and capital gains arising from government securities, effective April 1, 2026. Prior to the change, foreign investors were subject to withholding tax on interest income and capital gains tax on gains from government securities. The move was aimed at improving post-tax returns and making Indian government bonds more attractive to overseas investors.
The RBI’s gold stock remained unchanged at 880.52 metric tonnes as of the week ended July 31.
The outstanding net short dollar position in the forward market fell to $103.33 billion by June-end from $106.67 billion at May-end.
Short positions with a tenure of less than one year fell to $40.33 billion by June-end, against $50.59 billion at May-end. However, short positions with a tenure of more than one year rose by around $8 billion to $64.21 billion.
Of the $103 billion net short dollar position, $10.18 billion was in one-month contracts, $5.73 billion in contracts with tenures of one to three months, $24.42 billion was set to mature between three months and a year, and the remaining $64.21 billion was in contracts with a tenure of more than a year.
Further, as of July, the Real Effective Exchange Rate (REER) of the Indian rupee stood at 91.75, against 91.26 in June.
The REER adjusts the Nominal Effective Exchange Rate (NEER) to account for inflation differentials between India and its major trading partners. A REER value above 100 indicates an appreciation of the rupee relative to the base year, potentially making Indian exports less competitive in global markets.
First Published: Aug 25 2026 | 7:49 PM IST
