The RBI on Thursday introduced some more measures in its third round to make rupees scarce by announcing out-of-turn sales of Rs 22000 crore worth bonds every Monday. Previously, RBI announced that it would transfer a record surplus of Rs 33010 crore to the government, an increase of overall 106% over Rs 15010 crore last year. The central bank generates it’s surplus heavily from intervention in and money markets and foreign exchange. Reserve Bank of India’s profits is the highest during the period of volatility.
The decision of transferring the surplus was taken at the central bank’s board meeting. The meeting will be the last under present governor D Subbarao. Reserve Bank of India also announced that the new governor-designate Raghuram Rajan will take charge as an officer on special duty for three weeks and will be appointed on September 5. The RBI measures are part of the central bank’s strategy to improve the weakening rupee. The rupee on Thursday saw its biggest single-day gain in two weeks, closing at 60.86 against the dollar from its bad record closing low of 61.30 on Wednesday.
There are expectations that the Centre would take measures to improve the weakening rupee and attract dollars boosted government bonds. In its earlier rounds of measures last month, RBI said it would restrict its overnight bank lending to 5 percent of a bank’s deposits. It has also conducted a bond auction to keep rupees in limited supply.