RBI says it did not intervene in foreign exchange market in March

The Reserve Bank of India (RBI) did not buy or sell dollars in the foreign exchange market for the fourth straight month in March, the central bank's monthly bulletin showed on Wednesday.

The rupee moved from around 46.09 per dollar levels at the start of March to 44.88 levels towards the end, helped by robust capital inflows of a net $4.4 billion.

The rupee's fortunes are closely linked to capital flows. So far in 2010, foreigners have purchased a net $6 billion worth of local shares, adding to record inflows of $17.5 billion in 2009.

In 2009, the central bank sold a net $5.8 billion to prevent the rupee from depreciating sharply. For the 2009-10 fiscal year the central bank has been a net seller of $2.6 billion.

The rupee had dropped to a record low of 52.2 per dollar in early March 2009, but it ended the fiscal year 200910 up 4.7 percent boosted by large foreign fund inflows and periodic central bank intervention.

On Wednesday, the partially convertible rupee  was trading at 45.2728 per dollar, marginally stronger from its previous close of 45.3031.