- The RBI's net short dollar position hit a record $103 billion in March
- Net short positions increased by $25.4 billion from February levels
- RBI intervened in onshore and offshore forwards amid US-Iran war tensions
The Indian central bank's intervention in the derivatives market rose sharply in March with its net short dollar position surging to a record $103 billion.
Net short dollar positions rose $25.4 billion from February, according to Bloomberg calculations based on Reserve Bank of India data released Thursday.
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The data, which is a reflection of the RBI's intervention in both onshore and offshore forwards markets, rose as the authority intensified its defense of the currency in the midst of surging crude prices following the US-Iran war.
“The massive buildup was expected as the central bank defended the currency in the spot and forwards market due to the Iran war,” said Madhavi Arora, chief economist at Emkay Global Financial Services Ltd.
The RBI's total short positions stood at $51.4 billion in the up to one year bucket, while it was at $52.8 billion in the above one year category, the data showed. It also had a $1.1 billion long position in the up to one month segment, the data showed.
The rupee's slide in March led the central bank to take steps to limit banks' open position limits to $100 million. It also asked banks to stop offering offshore contracts, involving the rupee, to clients, but reversed that move later.
The currency recovered after the RBI's steps but has come under renewed pressure as crude prices continued to climb. The rupee fell to a new record low of 95.3337 to a dollar on Thursday on growing worries that rising crude prices would lead to a wider current account gap amid sparse capital inflows.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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