Amidst rupee volatility, the Reserve Bank of India was net seller of dollars worth $107 million in the spot forex market in the month of May.
As per the data of Monthly Bulletin for July 2013, the central bank purchased $3.003 billion in May while it sold $3.110 billion during the month.However, in April RBI had purchased a net $518 million in the spot forex market.The RBI sells and purchases dollar in the market to check currency volatility.
In the forward dollar market, the outstanding net forward sales at the end of May by the RBI stood at $5.8 billion, versus $8.23 billion in the previous month. In recent months, the RBI has taken a series of steps to check volatility in the rupee and curb speculative activity.The rupee fell from 53.8 levels at the end of April to 61-levels in a space of three months.
The rupee on Wednesday closed higher by 49 paise to 59.65 against the American currency on selling of dollars by banks and exporters as the RBI took steps to curb volatility in the currency amidst weakening of dollar in overseas market. On Monday, rupee had plunged to its all time low of 61.21 per US dollar on rising concerns that the US Federal Reserve may taper its quantitative easing programme from this year.