Banks remained flushed with foreign exchange throughout the week that ended on July 13 and foreign exchange reserves rose to a new all-time high of $15.63 billion on July 7. The State Bank, taking advantage of growing foreign exchange, amended its November 2004 decision of selling dollars to banks to finance oil import bills.

The central bank asked them to buy part of their requirement including the dollars needed for financing imports of furnace oil from the inter-bank market. But the decision did not have an adverse impact on the health of the rupee for the time being: the rupee closed at 60.37 a dollar on July 13