NEW DELHI — The Reserve Bank of India (RBI) recorded net foreign exchange purchases of $7.41 billion in February, marking the second consecutive month of net dollar buying, according to data released in its latest monthly bulletin on Thursday.
During the month, the central bank bought $21.4 billion and sold $13.99 billion in the forex market. This follows a net purchase of $2.5 billion in January, indicating a continued intervention to manage currency stability.
The Indian rupee strengthened by about 1 percent against the U.S. dollar in February, its first monthly gain in 10 months. The appreciation came after the announcement of a trade agreement between India and the United States, which boosted investor sentiment.
However, the recovery proved short-lived. Escalating conflict in West Asia disrupted global energy markets and triggered significant foreign portfolio outflows from Indian equities and debt markets. The rupee subsequently fell to a record low of 95.21 against the dollar in late March before recovering slightly due to RBI measures aimed at curbing speculative trading. The currency is currently trading near 93.50 per dollar.
The RBI’s net outstanding forward dollar sales rose to $77.67 billion at the end of February, up from $67.77 billion a month earlier, reflecting increased forward market interventions.
Looking ahead, the central bank has projected India’s real GDP growth at 6.9 percent for the 2026–27 fiscal year, citing strong domestic demand supported by private consumption and sustained investment activity.
At the same time, the RBI cautioned that the outlook remains uncertain due to shifting global trade dynamics and rising geopolitical tensions in West Asia.
Global economic activity has remained relatively resilient through the second half of 2025 and into early 2026. The International Monetary Fund has slightly raised its global growth forecast to 3.3 percent for 2026 in its January update. However, the RBI noted that this resilience is uneven, driven largely by technology investments — particularly in artificial intelligence infrastructure — and concentrated in regions such as North America and parts of Asia.
The bulletin also warned that ongoing geopolitical tensions continue to pose risks. Attacks on energy infrastructure in the Gulf and partial disruptions in the Strait of Hormuz have affected global energy supplies and trade flows. These developments have weakened the near-term outlook for global growth.
Additionally, widening fiscal deficits in major economies could lead to higher long-term interest rates and tighter financial conditions worldwide, potentially triggering capital outflows from emerging market economies like India, the RBI said. (Source: IANS)
