The Reserve Bank of India net sold USD 6.104 billion in the spot currency market in May, marking the third consecutive month of selling to ease pressure on the Indian rupee.
This is the third consecutive month of selling by the central bank amid pressure on the Indian rupee. The central bank had sold USD 9.758 billion in the spot currency market in March and USD 8.944 billion in April.
On a gross basis, the central bank purchased USD 22.229 billion in May, and sold USD 28.333 billion, as per the bulletin.
The rupee strengthened in June owing to lower international crude oil prices and improving foreign inflows due to measures taken by the government and the Reserve Bank.
The gains have been reversed in July, in line with other major emerging markets in the context of strengthening of the US dollar, the RBI said.
In real effective terms, the local currency appreciated in June vis-a-vis its major trading partners, driven by appreciation of the rupee in nominal effective terms and higher domestic inflation, the bulletin added.
On Wednesday, the rupee depreciated 34 paise to close at 96.59 (provisional) against the US dollar on Wednesday, weighed down by surging crude oil prices and heightened geopolitical uncertainty.
Forex traders said risk aversion in global markets and a negative trend in domestic equities further dented investor sentiments.
At the interbank foreign exchange, the rupee opened at 96.36 against the US dollar and traded in the range of 96.25 to 96.57 during the day. The domestic unit finally settled at 96.59 (provisional), lower by 34 paise from its previous close.
On Tuesday, the rupee had settled higher by 11 paise at 96.25 against the American currency.