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Market Chatter: Indian Central Bank's Net-short Dollar Book Rose Sharply Prior to Support Measure

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India's central bank increased its commitments to deliver dollars in May as part of efforts to support the local currency, Bloomberg reported Monday.

The Reserve Bank of India's net-short dollar book, a measure of forward-market commitments, rose sharply to about $110 billion to $115 billion last month from $95.3 billion in April, the report said, citing people familiar with the developments.

The RBI's intervention intensified after the rupee weakened to a record low on May 20, though the currency finally received some breathing room after the government scrapped taxes on overseas investment in the country's bonds.

The move, announced recently, spurred the largest inflow in almost a year to India's index-eligible bonds, the report said.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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