Macronomics: RBI’s Dollar Trade Takes Us Back to 2007


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It’s been a few quiet days at Capital Mind as the anti-histamines have turned our brains into jelly. The situation has now improved considerably, which lets us look at the pieces of data that came in over the week. Today’s piece is about how the RBI has borrowed from our tomorrow to make our today look better.

  • RBI’s Bulletin shows a $10 billion net ‘purchase’ of the US Dollar.
  • In reality it is $8 billion of net ‘sales’, thanks to forward obligations.
  • Look, we’re back to 2007 on the RBI forex reserves pieces, if you consider forward obligations.
  • The impact, on liquidity and inflation.

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