The Reserve Bank of India has reportedly intervened in the foreign exchange market to stabilise the rupee as rising oil prices and US bond yields exert downward pressure on the currency, marking a consistent pattern of support amidst global economic uncertainties.
The Reserve Bank of India is believed to have stepped into the foreign-exchange market on Friday to slow the rupee’s decline, traders said, as a rise in oil prices and higher US bond yields weighed on the currency. According to Reuters, state-run banks were seen selling dollars, a move market participants said was likely on the central bank’s behalf.
The rupee fell as much as 0.4% to 95.7925 before recovering some ground to trade at 95.7275. Traders said the pressure came as Brent crude climbed to almost $110 a barrel in Asian trading, with investor concern deepening over the conflict in the Middle East.
The intervention fits a pattern seen in recent weeks. Business Standard reported earlier this month that the RBI had again sold dollars to steady the rupee when oil prices rose and Asian currencies softened. Reuters also reported in late August that the central bank moved to support the currency as bets on a US rate hike added to the strain.
Market participants have increasingly pointed to the RBI’s willingness to lean against sharp moves, particularly when imported inflation risks rise alongside currency weakness. Moneycontrol has reported that the central bank has expanded its defence of the rupee across both spot and offshore non-deliverable forward markets, aiming to curb excess volatility rather than defend a fixed level.
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