RBI Spent USD 398 Bn To Defend Rupee In FY25

New Delhi, May 22 (KNN) The Reserve Bank of India reported record foreign currency sales of USD 398.71 billion on a gross basis during the 2024-25 financial year, as the central bank intensified efforts to defend the rupee against global market volatility.

The sales figure, released in central bank data on Wednesday, represents a significant increase from USD 153.03 billion in 2023-24 and surpasses the previous record of USD 212.57 billion set in 2022-23.

Despite substantial purchases of foreign currency during the same period, the RBI recorded net sales of USD 34.51 billion for the twelve months ending March 2025.

This marks only the seventh instance in three decades of available data where the central bank sold more foreign currency than it purchased.

The net sales figure ranks as the second-highest on record, trailing only the USD 34.92 billion sold during the 2008-09 global financial crisis.

The rupee experienced significant pressure during the latter half of 2024-25 following increased speculation about Donald Trump's return to the U.S. presidency.

Market interventions by the RBI reached their peak in December 2024, when the central bank sold USD 69.05 billion in foreign currency, representing the highest monthly total in its history.

The second half of the financial year proved particularly challenging, with the RBI selling USD 291.03 billion during this period, accounting for 73 percent of total annual gross sales.

Market concerns over anticipated protectionist trade policies under the Trump administration contributed to the rupee reaching an all-time low of 87.95 per dollar in early February 2025.

The currency defence operations came at considerable cost to India's foreign exchange reserves, which declined by approximately USD 80 billion between late September 2024 and mid-January 2025, falling below USD 625 billion.

(KNN Bureau)