RBI accumulates, but AeJ central banks broadly sold USD in July: Foreign Exchange - Asia ex-Japan

Research evidence excerpt

Asia Insights

Global Markets Research

18 August 2026

Foreign Exchange - Asia ex-Japan

RBI accumulates, but AeJ central banks broadly

sold USD in July

India’s FX reserves were primarily supported by FCNR(B) inflows, while

equity outflows and USD volatility drove most central banks to sell USD.

• Our estimates suggest AeJ central banks (except the RBI) net sold FX/USD in July.

• We estimate BI net sold USD1.3bn of FX reserves (FXR; spot + forward; -1.0% of FXR)

in the month. BI confirmed it was intervening in onshore and offshore FX markets.

• The BOT net sold USD4.1bn of FXR (spot + forward; -1.7% of FXR) in July to lean

against THB depreciation pressures.

Research Analysts

Asia FX Strategy

Craig Chan - NSL

Wee Choon Teo - NSL

Vicky Chen - NSL

• By contrast, the RBI net accumulated USD19.8bn in spot FXR from the FCNR(B)

scheme. However, the RBI’s net short forward book will likely expand significantly in

coming months (data available only to June) and more than offset the spot reserve

accumulation.

Key observations

• In India, we estimate the RBI accumulated USD19.8bn worth of spot FXR in July

(3.7% of June FXR), primarily due to the FCNR(B) scheme. The RBI reported (1

August) that the FCNR(B) scheme had attracted USD36.7bn of deposits as of 31 July,

and these deposit inflows will likely be swapped by the banks with the RBI with a lag.

Taking into account RBI’s total net short forward book for July, which is set to be

released at the end of August, we should see a more complete picture of the RBI’s FX

intervention in July and expect to show that it sold FX/USD in July. Bloomberg

reported on multiple occasions through July that the RBI was selling USD.

The RBI’s net short forward book was reduced by USD3.3bn to reach -USD103.3bn

in June 2026, down from a record -USD106.7bn in May. In coming months, the

RBI’s net short forward book is likely to expand significantly as it enters FX swaps

at concessional rates with banks because of the FCNR(B) scheme.

• In Indonesia, we estimate BI net sold USD1.3bn of FXR (spot + forwards) in July (1.0% of June FXR), after adjusting for FX valuations, coupon receipts and FX bond

issuance, and FX term deposits.…