India’s foreign-exchange pile unexpectedly climbed $634 million in a week that may have required significant central bank intervention to halt the rupee’s slide, pointing to the role earlier forward contracts may have played in boosting forex reserves.
For the week ended March. 4, it may have taken deliveries of past forwards/futures contracts instead of rolling them over, dealers said.
In a truncated week between February 28 and March 4, the rupee swung as much as 1.55 percent to an intraday low of 76.45 from an intraday high of 75.28 a dollar as the Russian invasion of Ukraine caused asset prices to whipsaw wildly. The Reserve Bank of India (RBI) is estimated to have sold 2-4 billion worth of dollars to arrest further losses in the local unit’s value during the week.
“The optical numbers showing up in the latest forex reserves may not be necessarily indicative of the amount of central bank intervention,” said Ashhish…
