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RBI Short Dollar Forward Position Rises After Seven Months

4 November 20251 min read
BANKING & FINANCERBI Short DollarForward PositionRises After SevenMonths4 November 2025safalsetu.com

Why in the news

The central bank’s short forward book grew after seven months, pointing to rupee defence.

Key facts

  • A short dollar forward position means dollars sold for later delivery through forward contracts.
  • Used to steady the rupee and the exchange rate.
  • Forwards avoid visible reserve depletion from big spot sales.
ImpactEffect
Exchange rateSmoother rupee-dollar moves
LiquidityNo excess rupee liquidity from spot sales
ReservesHeadline forex reserves stay steady

Exam angle

  • Spot means immediate delivery; forward means later delivery.

Test yourself

1. What does a short dollar forward position of RBI indicate?

The notes define it as dollars sold for future delivery via forwards.

2. How long had it been since RBI's short dollar forward position last rose, before the October 2025 increase?

The rise was the first in seven months.

3. Why can forward intervention be preferred over heavy spot selling by RBI?

Forwards avoid visible reserve depletion, keeping headline reserves steady.

This topic is part of Daily Current Affairs 4 November 2025 (15 topics).

All topics of the dayDay quizNovember 2025

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