The Reserve Bank of India (RBI) intensified its dollar sales during the fiscal year 2025-26 (FY26) to manage exchange rate volatility. According to data, the central bank recorded a total net sale of $53.1 billion over the course of the fiscal year, marking an increase of $12 billion compared to net sales of $41.1 billion in the previous fiscal year (FY25). Despite temporary periods of dollar accumulation, the RBI maintained a decisive stance as a net seller of foreign currency across both fiscal years.
Profit from Forex Intervention
Given that the dollars were purchased when the rupee was stronger, bankers estimate that the RBI made at least a 10% profit on its sales. In other words, nearly Rs 50,000 crore of the central bank's income could have come from forex intervention in FY26. The impact of dollar sales on the RBI's reserves has been partly cushioned by the increase in the value of gold holdings.
Aggressive Tactical Maneuvering in March 2026
The closing months of FY26 highlighted aggressive tactical maneuvering by the central bank. In March 2026, the RBI heavily liquidated greenbacks, executing a net sale of $9.8 billion. This marked a swift and complete reversal from February 2026, when the central bank had actively absorbed dollars with a net purchase of $7.4 billion.
Monthly Peaks Over Two Years
An analysis of monthly peaks over the two-year horizon shows that the absolute highest volume of net dollar sales occurred in November 2024 (FY25), when the central bank flooded the market with a massive net sale of $20.2 billion. In comparison, the peak selling month for FY26 was October 2025, which saw a net liquidation of $11.9 billion. Conversely, the RBI demonstrated its strongest appetite for dollar accumulation in March 2025 (FY25), wrapping up that fiscal year with an impressive net purchase of $14.7 billion. This remains the highest volume of net purchases across the entire two-year duration, comfortably eclipsing FY26's peak accumulation month of February 2026, where net purchases stood at $7.4 billion.
Rupee Rises on RBI Intervention
The rupee rose for the second straight session on Friday, gaining 51 paise to close at 95.69. Combined with Thursday's 62 paise appreciation, the currency has erased most of its losses from earlier in the week. The rupee strengthened despite firming global oil prices, with crude swinging higher as stop-start US-Iran peace talks continued to seesaw and dragged market sentiment with each shift. Support came from RBI intervention and the announcement of a $5 billion swap, which is expected to add to the central bank's forex reserves in the medium term.
Forex Reserves Fall by $8.1 Billion
Meanwhile, forex reserves fell by $8.1 billion to $688.9 billion in the week ended May 15. This decline was driven mainly by a $6.5 billion drop in foreign currency assets (FCAs) and a $1.5 billion decline in gold reserves due to valuation effects.
