Mumbai: The Reserve Bank of India (RBI) recorded its highest-ever monthly net dollar purchases in August, buying a net $43.26 billion from the foreign exchange market as funds mobilised under its concessional swap facility flowed back to the central bank, it was announced on Friday.
According to the RBI’s monthly bulletin, the central bank purchased $74.47 billion during August while selling $31.21 billion, resulting in net purchases of $43.26 billion.
The figure was more than double the net purchase of $18.65 billion recorded in July. The sharp increase was largely driven by dollars raised under the RBI’s concessional swap window for FCNR(B) deposits, external commercial borrowings (ECBs) and overseas foreign currency borrowings. The funds mobilised by banks under the scheme were routed back to the central bank through the swap facility.
The RBI had advanced the closure of the facility to August 31 from the earlier deadline of September 30 after banks mobilised $52.3 billion under the programme by August 14.
The latest data also reflects a significant shift in the RBI’s foreign exchange operations. The central bank had been a net seller of dollars in 10 of the 17 months through August and sold dollars continuously between August and December 2025. After pausing sales in January and February 2026, it resumed net selling in March.
However, the trend reversed in FY27. Following net dollar sales in April and May, the RBI turned a net buyer in June and sharply stepped up purchases in July and August.
As a result, cumulative net dollar purchases in the current financial year rose to $47.43 billion by the end of August, compared with $4.17 billion at the end of July, nearly offsetting the $53.13 billion of net dollar sales recorded during the whole of FY26.
The central bank’s forward market book also expanded significantly. The RBI’s outstanding net short dollar position in the forward market surged to a record $200.06 billion at the end of August, up from $136.77 billion in July, reflecting an increase of around $63 billion in a single month.
Short-dollar positions with maturities of less than one year increased to $55.15 billion from $47.66 billion, while positions with maturities exceeding one year nearly doubled to $176.57 billion from $91.54 billion.
At the same time, the RBI’s long dollar positions increased sharply to $31.66 billion at the end of August from $2.43 billion a month earlier.
Since all of these positions mature within one month, the central bank’s net short position in contracts maturing within one year declined to around $23.5 billion in August from $45.2 billion in July after adjusting for long positions.
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