(Sept 1): The Reserve Bank of India’s net short dollar book jumped to a record US$136.8 billion (RM552.12 billion) in July, reflecting rising future obligations from its measures to lure foreign capital, including a special deposit programme for overseas Indians.

The position increased by US$33.5 billion, largely driven by an increase in contracts maturing more than a year out, Bloomberg calculations from RBI data showed. Short positions in that maturity rose to US$91.5 billion from US$64.2 billion, the data showed.

The RBI mobilised US$72.8 billion through its various forex plans, the latest data showed. While those inflows bolster reserves, the central bank will have to return the dollars when the three- to five-year deposits mature, adding to its future dollar obligations.

“The large forward book will remain a sporadic concern, especially whenever global stress factors worsen, given the increase in spot FX reserves has not been commensurate, thanks to persistent need to intervene,” said Dhiraj Nim, a forex strategist at Australia and New Zealand Banking Group in Mumbai.

The inflows have helped push forex reserves to a record US$729.3 billion, giving the authority more firepower to support the rupee, which remains one of Asia’s worst-performing currencies. The rupee rose to a two-month high on Tuesday, outperforming Asian peers, amid central bank intervention, traders said.

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