MUMBAI: The Reserve Bank of India (RBI) sold nearly $400 billion in foreign currency during the 2024-25 fiscal year to stabilize the rupee amid global economic turbulence, according to data released by the central bank on Wednesday. This figure, amounting to $398.71 billion, marks a significant escalation from the $153.03 billion sold in the previous fiscal year and surpasses the prior record of $212.57 billion set in 2022-23.
The RBI’s aggressive interventions were particularly pronounced in the latter half of FY25, with $291.03 billion 73% of its total gross sales sold between October 2024 and March 2025. The peak came in December 2024, when the RBI offloaded $69.05 billion, the highest monthly sale ever recorded, in response to market panic triggered by anticipated protectionist trade policies under U.S. President Donald Trump’s second term. These policies contributed to the rupee hitting a historic low of 87.95 against the dollar in early February 2025.
Despite substantial purchases of foreign currency throughout the year, the RBI recorded a net sale of $34.51 billion for FY25, marking only the seventh instance in three decades where sales outpaced purchases. The intensified efforts to curb rupee volatility led to a significant drawdown in India’s foreign exchange reserves, which fell by approximately $80 billion from late September 2024 to mid-January 2025, dipping below $625 billion.
To counter the reserve depletion and attract capital inflows, RBI Governor Shaktikanta Das announced in December 2024 a 150-basis-point increase in the interest rate ceiling for Foreign Currency Non-Resident (Bank) deposits, effective until March 2025. However, this measure yielded limited results, with FCNR(B) deposit inflows reaching $7.08 billion in FY25, only marginally higher than the $6.37 billion recorded in FY23-24, according to RBI data .
