Mumbai: The RBI lowered the US dollarNSE 1.32 % purchases in May by almost half the purchases in May to just about $2.5 billion as the inflows slowed amid uncertainty about US interest rates and elections.

The Reserve Bank bought $5.1 billion and sold $ 2.6 billion in May, taking the net spot dollar purchases by the central bank to $ 2.5 billion, according to the latest figures released by the Reserve Bank of India. This almost half the level of net dollar purchases in April this year, during which the central bank bought a net of $ 4.9 billion from the spot market. The central bank was a net seller in May 2018, during which it sold a net of $ 5.8 billion. 

The central bank has remained a very passive participant in the forward markets as well. It bought $224 million in the forward markets in May, the RBI data indicates. Foreign portfolio investors were cautious during the month bringing in a little less than a $ 1 billion during the month. Also foreign direct investment slowed during the month. The rupee weakened by about 0.1% during the month to end at Rs 69.65 by end May. 

Published On : 11-07-2019

Source : Economic Times