The Reserve Bank of India sold a net $8.94 billion in the foreign exchange market in April, data released on Monday showed, as it stepped in to support the rupee that had plunged to record lows amid the U.S.-Iran war.
The RBI said in its monthly bulletin that it purchased $16.23 billion and sold $25.17 billion in April. In March, the central bank had sold a net $9.8 billion.
The volume of the central bank's gold holdings, meanwhile, was unchanged during May at 880.52 metric tonnes, even as its value declined from $120.23 billion in late April to $112.6 billion last month, the data showed.
The Indian rupee had slumped to a record low of 96.96 per dollar last month as surging oil prices and higher global bond yields pummeled the South Asian unit. The currency was consequently shored up by firm RBI intervention over multiple trading sessions.
The RBI's net outstanding forward dollar sales stood at $95.30 billion as of end-April, compared with $103.06 billion as of end-March.
While a media report earlier in the month had suggested that the central bank may have sold part of its gold reserves, this was subsequently rebutted by the RBI. The physical stock of the precious metal has remained unchanged at 880.52 tonnes since early April, the data showed.
The backdrop for the rupee has improved, following a salvo of policy measures announced earlier this month to shore up dollar inflows into the world's fourth-largest economy as well as a sharp retreat in oil prices on signs of progress in U.S.-Iran negotiations.
On Monday, the rupee closed down 0.4% at 94.6775 per dollar. Latest data show that India's foreign exchange reserves declined to a more than one-year low of $671.6 billion, reflecting the central bank's efforts to defend the embattled currency.
