RBI sold $6 billion in May to defend oil-hit rupee
UPSC / SSC current affairs note · Economy
Why in news
The RBI's monthly bulletin reveals that it sold a net $6 billion in May to support the rupee amid rising oil prices. This follows a net sale of $8.9 billion in April, indicating continued intervention in the forex market.
Background
The RBI intervenes in the foreign exchange market to curb excessive volatility in the rupee. Rising crude oil prices increase India's import bill, putting pressure on the rupee.
Key facts
in5points
RBI purchased $22.2 billion and sold $28.3 billion in May.
Net sale in May was $6 billion.
In April, RBI sold a net $8.9 billion.
Intervention aimed at defending the rupee from oil price impact.
Data released in RBI's monthly bulletin.
Prelims pointers
- RBI: Reserve Bank of India
- Foreign exchange intervention
- Rupee depreciation due to oil prices
- Monthly bulletin of RBI
Mains angles
- Role of RBI in managing exchange rate volatility
- Impact of crude oil prices on Indian economy and forex reserves
- Tools of monetary policy: forex intervention