Merchant and Inter-Bank FX Turnover Surge: RBI Data Highlights Robust Foreign Exchange Activity
The Reserve Bank of India (RBI) has released crucial data detailing daily merchant and Inter-Bank transactions in the foreign exchange market for the period spanning July 20, 2026, through July 24, 2026. These figures, provided by the RBI in USD Millions, offer a detailed snapshot into the volume and direction of currency movements across both the retail and institutional finance segments during that week.Analysis of Merchant Foreign Exchange Transactions (FCY/INR)
Merchant transactions reflect the foreign exchange activity involving Indian Rupee (INR). The data indicates significant movement in merchandise purchasing throughout the five-day period.On July 20, 2026, the total merchant sales under FCY/INR stood at 6,374 USD Millions across all transaction types. This was followed by a slight dip to 4,878 USD Millions on July 21. The activity recovered notably on July 22, reaching 5,660 USD Millions before settling at 5,609 USD Millions on July 23.
The final day, July 24, recorded the highest FCY/INR purchase volume for merchants at 6,526 USD Millions. In terms of forward contracts, merchant purchases averaged approximately 2,700 USD Millions across the five days, showing sustained reliance on future currency exchange agreements.
Trends in Merchant Foreign Exchange (FCY/FCY)
The FCY/FCY segment of merchant activity reflects transactions between two foreign currencies. This segment shows varied trends compared to INR-based purchases.Merchant sales under FCY/FCY ranged from a low of 224 USD Millions on July 24 to a peak of 764 USD Millions recorded on July 20, corresponding to a particular type of transaction volume. The data highlights consistent participation in dual-currency merchant trade throughout the period.
Volume and Direction in Inter-Bank Market Activity
The Inter-Bank segment details the large-scale financial transactions between banks. This market shows significantly higher volumes compared to the merchant sector.Inter-Bank activity in FX/INR spanned impressive amounts, with totals ranging from 12,650 USD Millions recorded on July 23 to a high of 18,796 USD Millions on July 24 for one specific transaction type. The overall robust volume signals deep institutional engagement in the forex market.
Inter-Bank transactions involving FCY/FCY also demonstrated considerable scale. Volumes ranged from a low of 136 USD Millions to an observed high of 8,323 USD Millions across the five days as institutions managed their currency exposures.
Summary of Market Movement and Institutional Trading
The RBI data provides a granular view into how different market participants engage with foreign exchange over time. The merchant segment showed volatility but maintained a high level of activity, frequently reaching above 5,000 USD Millions in FCY/INR transactions.For the institutional Inter-Bank sector, transaction volumes remained consistently strong and high throughout the period. This consistent high volume underscores active hedging and speculative trading among major financial institutions utilizing both Spot and Forward markets for risk management.
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