RBI's net forward book shrinks $34.94 bn in first 3 months of FY23

The multi-pronged defence of the rupee is behind the sharp fall in RBI's long forward position

The Reserve Bank of India’s (RBI’s) outstanding net forward purchases of US dollars fell by more than 50 per cent from the last quarter of FY22 to $30.86 billion in the June quarter (Q1). The net forwards position was at $65.79 billion at the end of the last fiscal year.

The purchases fell by $18.33 billion in June as the central bank intervened in both the forwards and the spot market in order to protect the rupee from excessive depreciation in the face of a widening trade deficit.

Data in the RBI’s August 2022 Bulletin show that the bank’s net