The Reserve Bank of India (RBI) is reportedly intervening in the foreign exchange market by selling dollars through public sector banks to prevent the Indian rupee from hitting a record low. The rupee has been under pressure and was trading at 83.2025 against the U.S. dollar, just shy of its all-time low of 83.29.
RBI’s Dollar Sales
According to six traders cited by Reuters, the RBI is likely behind the dollar-selling operations via public sector banks. Large public sector banks are reported to be actively selling dollars in the market. The RBI’s approach involves offering dollars at various price points, without adhering to a specific exchange rate.
Market Response
Traders are noting that despite the RBI’s intervention, the rupee may still face downward pressure, and a new record low cannot be ruled out. The market appears to be absorbing the dollar selling without significant resistance.
Conclusion
The RBI’s efforts to stabilize the rupee highlight the central bank’s commitment to maintaining exchange rate stability. While these interventions aim to prevent a further slide in the rupee’s value, the currency’s performance will continue to be influenced by various domestic and international factors. The RBI remains watchful, ready to take necessary measures to safeguard India’s economic stability.
