The Reserve Bank of India recorded net foreign exchange sales of $9.76 billion in March, a dramatic reversal from net purchases of $7.4 billion in February. The rupee fell approximately 4% during March, its steepest monthly decline since 2019, driven by soaring energy costs tied to the ongoing US-Iran conflict.
The central bank purchased $19.88 billion while selling $29.64 billion in March, with outstanding forward dollar sales surging to a record $103.06 billion.
For the full fiscal year 2025, the RBI recorded total net sales of $34.5 billion, the highest level of net dollar selling since the global financial crisis of 2008-09. The rupee has weakened over 7% during 2026 overall, with one-year forwards briefly surpassing 100 against the US dollar.
India imports roughly 80% of its crude oil, making it uniquely vulnerable to supply disruptions and price spikes, widening its trade deficit and creating persistent dollar demand.