RBI FX forward book expected to shrink
India central bank forward dollar liabilities reached a record two hundred billion dollars in August following strong inflows. Analysts expect the forward book to decline as the RBI deploys swaps to manage liquidity.
India's net forward dollar liabilities surged to $200 billion in August, driven by central bank absorption of $143.5 billion in policy-induced inflows. The forward liabilities rose $63 billion month-on-month after reaching $137 billion in July. Market participants anticipate a decline in the forward stock as the central bank deploys sell/buy swaps to manage liquidity.
