The Reserve Bank of India actively stepped into the forex market on Monday to prevent a sharp decline in the rupee amid persistent external pressures, including rising oil prices and geopolitical tensions in West Asia, signalling a cautious approach to currency management.
The Reserve Bank of India was widely believed to have stepped into the foreign exchange market on Monday to steady the rupee, according to traders quoted by Reuters, as renewed tension in West Asia kept oil prices firm and investors on edge. The currency fell early in the session to 95.49 per dollar before losses were trimmed by dollar sales from state-run banks, which market participants said were most likely acting for the central bank.
Reuters reported that the RBI has been active in the market repeatedly over the past week, a pattern traders interpret as an attempt to keep expectations anchored rather than allow a disorderly slide in the currency. Brent crude rose 0.3% to $88.8 a barrel on the day, adding to pressure on India’s import bill and on sentiment around the rupee.
The intervention fits a broader pattern described in recent analysis of the RBI’s foreign-exchange management. An assessment published by ICICI Prudential AMC said the central bank has been using a graduated defence strategy in response to global uncertainty, relying on selective tools such as encouraging dollar inflows and allowing the rupee to adjust in a controlled way before turning to sharper rate moves.
That approach comes against a backdrop of persistent external pressure. The World Bank said in its April 2026 India Development Update that the rupee weakened by an average of 5% year on year in the 12 months to March 2026, as India’s goods trade deficit widened and foreign investment outflows continued. The bank also said the RBI intervened to limit abrupt volatility, while foreign-exchange reserves rose over the fiscal year to nearly $730 billion by the end of February.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
