RBI's $239 bn forward dollar position to limit rupee gains: Report

The Reserve Bank of India's net short position of USD 239 billion in the forward market is likely to limit the rupee's appreciation despite a recovery in foreign portfolio investor (FPI) inflows, according to a report. The Reserve Bank of India's (RBI) forward book stood at a net dollar short position of USD 239 billion as of September 2026, reflecting its commitment to provide dollars when buy-sell swaps mature. This will require the central bank to accumulate dollars as capital inflows improve, limiting the rupee's appreciation, IDFC First Bank Economic Research report said. Around USD 40 billion of the short position matures within a year, USD 56 billion in one to three years and the remaining USD 143 billion in three to five years. The longer-duration positions are largely linked to the FCNR (B) scheme, it added. "The large negative forward book implies that the RBI will need to accumulate dollars in order to meet the commitments when these buy-sell swaps mature. Hence, any ...