RBI Makes Largest-Ever Spot Market Intervention to the Tune of $7.4 Billion in February

Reserve Bank of India Posts Net Purchase of USD 7.409 Billion in February

The Reserve Bank of India (RBI) made significant strides in managing the country's foreign currency reserves in February, as per the central bank's monthly bulletin released on Thursday. According to the data, the RBI net purchased USD 7.409 billion from the spot currency market in February.

This marks the second consecutive month of net purchase of foreign currency by the RBI, following a streak of seven consecutive months of net sales prior to that. The RBI's gross purchases in February totaled USD 21.403 billion, while sales stood at USD 13.994 billion. In January, the RBI had made purchases of USD 2.526 billion.

The RBI's foreign exchange management activities have been closely watched in recent months, particularly in the wake of the conflict in West Asia and the announcement of the interim India-US trade deal agreement. The rupee appreciated in early February 2026 following the announcement of the trade deal, but depreciated in March as the conflict in West Asia intensified.

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To mitigate the risks associated with excessive speculative positioning in the foreign exchange market, the RBI introduced a prudential measure on March 27, 2026. The measure limits the net open position in INR (NOP-INR) of authorized dealers in the onshore deliverable market to within USD 100 million at the end of each business day.

Key Statistics: Foreign Exchange Market

In terms of the 40-currency real effective exchange rate (REER), the rupee depreciated by 3.3 per cent between September 2025 and February 2026, driven by depreciation of the currency in nominal effective terms. The rupee also depreciated by 6.2 per cent against the US dollar in H2 FY26.

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