RBI’s Zero Dollar Purchases in July 2025 Amid Rupee Slide
Why in the news
The RBI sold rather than bought dollars in July 2025 to steady the rupee, the first month without purchases since February 2014.
Key facts
- Rupee fell 2.23%, the worst monthly drop of the year; earlier: May 1.21%, January 1.16%, February 1.02%.
- Spot-market dollar sales: $2.54 billion, a shift from building reserves to stabilising the currency.
- Reserves fell $10.87 billion (from $6,99,736 million on 4 July to $6,88,871 million on 1 August), partly from Euro, Pound and Yen moves.
Pressures
- US 50% tariff, effective 27 August 2025; geopolitical tensions; foreign investor outflows.
Impact
| Area | Effect |
|---|---|
| Rupee | Less volatility, better confidence |
| Reserves | Dip; continued sales could weaken buffers |
| Inflation | Limits costlier imports, especially crude |
| Exporters | Moderate depreciation helps them |
Exam angle
- Priority: currency stability over reserve accumulation.