RBI's net dollar purchases hit record $43.26 billion in August 2026
Synopsis
The RBI's net dollar purchases in August hit an all-time monthly high of $43.26 billion — more than double July's figure — as banks routed swap-facility dollars back to the central bank. In under three months, FY27 net purchases of $47.43 billion have nearly wiped out the entire $53.13 billion of net dollar sales from FY26, marking one of the sharpest forex-strategy reversals in recent RBI history.
Key Takeaways
The RBI recorded a record net dollar purchase of $43.26 billion in August 2026 , its highest-ever monthly figure.
Gross purchases stood at $74.47 billion against sales of $31.21 billion during the month.
The surge was driven by banks routing $52.3 billion raised under the FCNR(B) concessional swap facility back to the RBI; the facility's deadline was advanced to 31 August from 30 September .
Cumulative FY27 net purchases rose to $47.43 billion by end-August, nearly offsetting $53.13 billion in net sales recorded during all of FY26 .
The RBI's net short dollar position in the forward market hit a record $200.06 billion at end-August, up from $136.77 billion in July.
The Reserve Bank of India (RBI) recorded its highest-ever monthly net dollar purchases in August 2026, acquiring a net $43.26 billion from the foreign exchange market — more than double the previous month's figure — as funds mobilised under its concessional swap facility flowed back to the central bank, according to data released on Friday, 23 October 2026.
The Scale of August's Purchases
According to the RBI's monthly bulletin, the central bank purchased $74.47 billion during August while selling $31.21 billion, yielding net purchases of $43.26 billion. This was more than double the net purchase of $18.65 billion recorded in July. The sharp uptick was largely driven by dollars raised under the RBI's concessional swap window for FCNR(B) deposits, external commercial borrowings (ECBs), and overseas foreign currency borrowings, which banks subsequently routed back to the central bank through the swap facility.
Notably, the RBI had advanced the closure of the facility to 31 August from the earlier deadline of 30 September, after banks mobilised $52.3 billion under the programme by 14 August alone.
A Significant Shift in Forex Strategy
The latest data reflects a marked change in the RBI's foreign exchange posture. The central bank had been a net seller of dollars in 10 of the 17 months through August, including a continuous spell of net dollar sales from August through December 2025. After pausing those sales in January and February 2026, it resumed net selling in March 2026.
The trend reversed decisively in FY27. Following net dollar sales in April and May, the RBI turned a net buyer in June and sharply accelerated purchases in July and August. This comes amid broader central bank efforts to manage rupee volatility and rebuild foreign exchange buffers.
Cumulative FY27 Purchases Nearly Erase FY26 Sales
As a result, cumulative net dollar purchases in the current financial year climbed to $47.43 billion by the end of August, compared with just $4.17 billion at the end of July. This nearly offsets the $53.13 billion in net dollar sales recorded across the whole of FY26 — a striking reversal in less than three months.
Forward Market Book Expands Sharply
The RBI's outstanding net short dollar position in the forward market surged to a record $200.06 billion at the end of August, up from $136.77 billion in July — an increase of roughly $63 billion in a single month. Short-dollar positions with maturities of less than one year rose to $55.15 billion from $47.66 billion, while positions with maturities exceeding one year nearly doubled to $176.57 billion from $91.54 billion.
Meanwhile, the RBI's long dollar positions expanded sharply to $31.66 billion at end-August from $2.43 billion a month earlier. Since all long positions mature within one month, the central bank's net short position in contracts maturing within one year declined to around $23.5 billion in August from $45.2 billion in July, after adjusting for these long positions.
What This Means for the Rupee and Markets
The unprecedented scale of RBI intervention signals a deliberate strategy to absorb surplus dollar liquidity generated by the swap facility, while simultaneously managing exchange rate stability. Analysts will watch whether the central bank sustains this buying pace into the second half of FY27, particularly as global dollar dynamics shift with evolving US Federal Reserve rate expectations. The forward book's record expansion also warrants close monitoring, as large off-balance-sheet positions carry rollover and hedging costs that will feed through to future monetary operations.
Point of View
Or a durable shift in RBI's willingness to let the rupee appreciate? The answer will define the exchange rate narrative for the rest of the year.
NationPress
24 Oct 2026
Frequently Asked Questions
Why did the RBI's net dollar purchases hit a record in August 2026?
The RBI's net dollar purchases surged to a record $43.26 billion in August primarily because banks that had raised funds under the central bank's concessional swap facility for FCNR(B) deposits, ECBs, and overseas foreign currency borrowings routed those dollars back to the RBI through the swap window. The facility was closed early on 31 August after banks mobilised $52.3 billion by 14 August.
What is the RBI's concessional swap facility?
The RBI's concessional swap facility is a mechanism that allowed banks to raise foreign currency — primarily US dollars — through FCNR(B) deposits, external commercial borrowings, and overseas foreign currency borrowings at concessional rates. Banks then swapped the mobilised dollars back to the RBI, channelling foreign inflows into the central bank's reserves.
How does August's figure compare to recent months?
August's net purchase of $43.26 billion was more than double July's $18.65 billion and far exceeded any previous monthly figure. It also pushed cumulative FY27 net purchases to $47.43 billion, nearly reversing the $53.13 billion of net dollar sales recorded across the entire FY26.
What is the RBI's record net short position in the forward market?
The RBI's outstanding net short dollar position in the forward market reached a record $200.06 billion at end-August 2026, up from $136.77 billion in July — an increase of around $63 billion in a single month. Positions with maturities exceeding one year nearly doubled to $176.57 billion from $91.54 billion.
What does the RBI's dollar-buying reversal mean for the rupee?
When the RBI buys dollars, it typically adds rupee liquidity to the system while preventing the rupee from appreciating too sharply. The scale of August's purchases suggests the central bank is absorbing large inflows to manage exchange rate stability, though the record forward book expansion indicates significant future hedging obligations that markets will monitor closely.
