RBI Intervenes to Prevent Rupee Slide Beyond 92/USD

India’s foreign exchange market witnessed heightened activity as the rupee approached the 92 per US dollar threshold. Traders reported that the Reserve Bank of India (RBI) likely stepped in by selling dollars, a move aimed at averting further depreciation and ensuring stability in the currency market.

The intervention comes amid global dollar strength, rising crude oil prices, and foreign fund outflows, all of which have pressured emerging market currencies. Analysts note that RBI’s actions are consistent with its long-standing strategy of smoothing volatility rather than defending a specific level.

Key Highlights:

• Rupee Pressure: Approached 92/USD, triggering concerns of sharp depreciation.
• RBI Action: Likely dollar sales to stabilize exchange rate.
• Global Drivers: Strong US dollar, higher crude prices, and foreign fund outflows.
• Policy Approach: RBI aims to curb volatility, not defend fixed levels.
• Investor Impact: Intervention reassures markets, supporting confidence in India’s macroeconomic stability.

The move highlights RBI’s proactive stance in managing external shocks while balancing domestic liquidity. Market watchers expect continued vigilance as global uncertainties persist.

Sources: Reuters, Economic Times, Business Standard