RBI's dollar sales surged in May

The Reserve Bank sold $1.26 billion dollars in the foreign exchange market in May, more than 4.5 times the quantity sold in the previous month, amid continuous slide of rupee against the US currency.

In April, the central bank had sold dollars amounting to $275 million.

The central bank also purchased $778 million dollars in May, resulting in a net sale of $485 million, RBI data said.

It further said that in the forward dollar market, the RBI's outstanding sales of the US currency increased to $10.31 billion in May from $3.45 billion in the previous month.

The higher sale of dollars indicate RBI's increasing tendency to intervene in the forex market to stymie the slide of rupee.

The domestic currency has been declining for past few months due to various reasons including capital outflow.

The rupee had depreciated by 6.34 per cent in May against the US dollar, the worst monthly performance in 6 months.