RBI bought $1.04 bn in June intervention, largest

RBI bought $1.04 bn in June intervention, largest

Mumbai: The Reserve Bank of India (RBI) bought a net $1.04 billion in intervention in June, marking the biggest monthly purchase of dollars by the central bank since April 2008.

A Wednesday bulletin from the central bank said it bought $1.28 billion and sold $235 million. The bank had purchased a net $4.3 billion in April 2008.

The dollar purchases were likely to rein in the rupee, which climbed to a seven-month peak of 46.75 against the dollar in early June this year. The rupee, however, reversed gains and touched a five-week low of 48.90 later in the month because of a fall in local equities.

It shed 1.65% in June, its steepest drop since February, as overseas investors pulled out about $650 million in the last two weeks that month.

The June intervention lowered the central bank’s net sales in 2009 to $6.07 billion from $7.11 billion in the previous month. In March, when the rupee fell to record low of 52.20 to the dollar, the RBI had sold $3.4 billion.

India’s foreign exchange reserves were at $271.641 billion on 31 July, from a peak of $316 billion in May 2008.