India’s central bank is burning through an unprecedented amount of financial ammunition to keep the rupee from cratering. The Reserve Bank of India’s forward dollar-selling contracts have crossed the $110 billion mark, reaching an estimated $110-115 billion in early June 2026, a record for the institution’s net-short dollar book.
Think of it like this: instead of selling dollars from its vault today and watching reserves drain in real time, the RBI is writing IOUs to sell dollars at a future date. It’s a way to defend the currency now while kicking the reserve hit down the road. The problem is that the IOUs are piling up fast, and the road isn’t getting any longer.
The numbers behind the intervention
The rupee slid past 96 per US dollar in May 2026, touching an all-time low that forced the RBI’s hand. That kind of depreciation makes oil imports more expensive, feeds into inflation, and rattles foreign investors holding rupee-denominated assets.
To fight back, the RBI deployed a two-pronged strategy. On one side, it ramped up spot dollar sales to a record $53.13 billion for the full fiscal year 2026. On the other, it leaned heavily into forward contracts, growing its net-short position from $88.8 billion in February 2025 to over $110 billion by mid-2026.
