MUMBAI, Sept 1 (Reuters) - The Reserve Bank of India’s net forward dollar book rose by $1.14 billion for up to one-year maturities in July, compared with $730 million in the previous month, according to Reuters calculations based on data from the central bank’s website.
The RBI also seems to have shifted its forwards intervention strategy to the longer end, as it bought $865 million of more than one-year dollar/rupee premium after a gap of several months, taking the on-month increase in overall forwards to $2.01 billion.
“This could be one way of trying to reduce any distortions in the shorter end forward dollar premium curve,” said one forex official at a state-run bank.
The increase in its up to one-year forward dollar position in the month points to the central bank’s efforts to mop up dollars when the rupee was rising in July. It also sold dollars in the spot market to prevent a sharp fall in the rupee, dealers said.
The rupee moved in a 63.30-64.21 per dollar band in July.
India’s forex reserves fell to $353.46 billion in July from $355.46 bln in June, which was also due to change in valuations of other currencies that the central bank holds, analysts said.
The RBI’s total long forwards position for up to one-year maturities was $33.55 billion as of July-end compared with $31.6 billion in June, according to RBI data.
The total short position in the up to one-year forwards market was $3.85 billion as of July-end, compared with $3.04 billion in June. The net positions up to one-year stood at $29.7 billion at end-July, up from $28.56 billion at the end of June.
The net short positions in forwards for more than one-year maturities stood at $25.1 billion, the data showed. (Reporting by Suvashree Dey Choudhury; Editing by Biju Dwarakanath)