The Reserve Bank of India stepped into the forex market to limit losses as the rupee faced prolonged weakness amidst rising oil prices, trade shocks, and geopolitical tensions, highlighting an active foreign-exchange policy.
On Monday, the rupee came under pressure as traders said the Reserve Bank of India appeared to be in the market again to limit losses. The currency briefly weakened to 95.49 per dollar, but state-run banks were seen selling dollars, which traders said was most likely on the central bank’s behalf.
That fits a pattern the IMF has described in recent research on India’s foreign-exchange policy. The fund said the RBI uses a mix of spot market sales and purchases, forwards and swaps to curb disorderly moves in the rupee, while noting that it can be difficult to measure the full scale of intervention because of the size of offshore and non-deliverable forward markets.
A separate policy brief from the National Institute of Public Finance and Policy said the rupee was unusually steady in the first half of fiscal 2026, which it linked to active RBI support. But the brief argued that those efforts have mattered less since the third quarter, when the currency entered a prolonged weakening phase amid tariff and trade shocks, West Asia’s war and a broader shift by foreign investors towards safety.
Oil prices have added to the strain. Brent crude rose 0.3% to $88.8 a barrel on the day, keeping imported energy costs elevated and reinforcing the pressure on the rupee. Traders said the RBI’s frequent presence in the market over the past week appeared aimed not only at limiting volatility but also at anchoring expectations around the currency.
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