India’s central bank went from accumulating dollars to torching them at a remarkable pace. 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 just one month earlier in February.

The reason is straightforward: the rupee fell approximately 4% during March, its steepest monthly decline since 2019. Soaring energy costs tied to the ongoing US-Iran conflict have been crushing the currency, and the RBI stepped in to keep the bleeding from becoming a hemorrhage.

The mechanics of a $30 billion month

The gross figures tell a more revealing story. The RBI purchased $19.88 billion while selling $29.64 billion across spot and related forex markets during March.

The RBI’s outstanding forward dollar sales surged to a record $103.06 billion by the end of March. Forward contracts are essentially promises to sell dollars at a future date, and that $103 billion figure represents the largest such commitment the Indian central bank has ever made.

A fiscal year of heavy lifting

March’s intervention wasn’t an isolated event. For the full fiscal year 2025, the RBI recorded total net sales of $34.5 billion. That figure represents 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. The US-Iran conflict has pushed oil prices sharply higher, widening India’s trade deficit and creating persistent demand for dollars among Indian importers.