Summary: In this article, I have attempted to estimate the Fx Intervention - both onshore and offshore by using Durable Liquidity and RBI data on Sale / Purchase of USDs and Outstanding Forward Position. I also reckon that Durable Liquidity and CiC numbers can help give broad estimates of Fx intervention on a more real time basis relative to the release of the monthly bulletin. According to my calculations, between Aug / Sep / Oct , RBI intervened close to $ 40 bn. The Central Bank is now allowing it to gradually roll off and ~ $19 bn of NDF positions have rolled off since peak intervention. The Durable Liquidity increased 22,928 crs over the fortnight ending 08 Mar 2024 to 186,908 crs. Remember, Changes in durable liquidity arises from permanent or long term changes in the liability of the Reserve Bank, i.e. change in Currency in Circulation (CiC) or change in Banking System Reserve Balances due to unsterilized Fx intervention or OMOs. CiC has increased to the tune of 36,...
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