RBI sold $2.9 bn in Nov, most in 30 months

The Reserve Bank of India sold $2.92 billion in the foreign exchange market during November — the highest monthly dollar sales in two and a half years. The central bank also sold dollars in the forward market, $1.6 billion, for the first time in the current financial year. The central bank sold dollars to arrest the rupee fall. The rupee was Asia’s worst performing currency in 2011 as it depreciated by almost 19 per cent. As a result of the dollar sales, the country’s foreign exchange reserves depleted by around $8 billion in November. In November, the rupee suffered its worst monthly fall in 16 years, plunging nearly seven per cent as persistent dollar demand from importers and portfolio outflows on global risk aversion pounded the local unit.

Source: Business Standard