The Reserve Bank of India (RBI) stepped in 'aggressively' in the forex market on Monday, reportedly selling between $4 billion and $7 billion to prevent the rupee from breaching the 88-per-dollar mark, Reuters reports.
The central bank’s efforts seem to have paid off—at least for now—with the rupee bouncing back above 87 on Tuesday.
The Indian currency hit an all-time low of 87.95 per dollar in early trading on Monday, prompting the RBI to intervene even before spot over-the-counter markets opened.
The intervention was described as “extremely aggressive” by a trader familiar with RBI's actions. He estimated that at least $4.5 billion to $5 billion was sold. However, there has been no official word from the RBI till now.
This marks a shift in how the RBI has been handling the rupee in recent weeks. Previously, the RBI had been intervening at a steady pace, without necessarily aiming to push the currency higher.
But with multiple pressures piling up—foreign portfolio outflows, uncertainty around U.S. trade policies, and sluggish domestic growth—it seems the central bank decided to act more forcefully this time.
Despite the rebound, the rupee is still among Asia’s worst-performing currencies so far this year.
