RBI Likely Intervenes with Dollar Sales Ahead of Market Open to Stabilize Rupee

India’s central bank is once again in the spotlight for its active currency management. According to traders, the Reserve Bank of India (RBI) likely sold U.S. dollars before the local spot market opened, aiming to cushion the rupee against sharp depreciation.

The rupee was quoted at 91.9825 per dollar at 9:01 a.m. IST, after forward market indicators suggested a potential breach of the 92-level. Such interventions are part of RBI’s broader strategy to maintain currency stability and investor confidence, especially amid volatile global flows.

Key Highlights:

• Early Intervention: RBI likely sold dollars before market open to prevent rupee weakness.
• Market Signals: Non-deliverable forwards indicated rupee could slip past 92 per dollar.
• Current Levels: Rupee opened at 91.9825 against the dollar.
• Policy Context: Intervention underscores RBI’s commitment to managing volatility and ensuring orderly currency movement.
• Global Backdrop: Pressure on emerging market currencies continues due to U.S. trade uncertainties and portfolio outflows.

This move reflects RBI’s balancing act—supporting the rupee while maintaining adequate reserves. Traders suggest such interventions will remain crucial as India navigates external shocks and domestic growth priorities.

Sources: Reuters; The Economic Times; Yahoo Finance