The Reserve Bank of India continued its dollar sales to stabilise the rupee, which remains confined to a limited range despite strong dollar bids and global financial volatility.
The Indian rupee edged lower on Thursday but remained boxed into a narrow range as the Reserve Bank of India continued selling dollars to steady the currency, according to the Economic Times. Traders said that even with pressure from maturing forward contracts and debt-related outflows, the central bank’s intervention kept the rupee from moving far in either direction.
The currency was trading at 95.36 per dollar, little changed from its previous close, and had moved within just 1 paisa during the session, the Economic Times reported. Market participants were left with few fresh signals after July inflation readings in India and the United States broadly matched expectations, while oil prices stayed close to $90 a barrel, limiting appetite for big bets.
The RBI’s willingness to lean against sharp moves has long been a feature of the rupee market. Earlier reports on the central bank’s currency operations show that it has repeatedly sold dollars through state-controlled banks when the rupee has come under pressure, including episodes when rising crude prices and a stronger dollar threatened to push the currency through key levels. Analysts have also noted that persistent intervention can help calm volatility but may drain domestic liquidity and complicate credit conditions.
Weekly market commentary from Union Bank of India has pointed to broader structural pressures on the rupee, including dependence on foreign capital, import needs and shifting global risk sentiment. The bank also said reduced short positions in forwards and futures have recently offered some support, even as traders continue to watch for the RBI’s next move and any fresh strain from global rates, trade tensions or capital outflows.
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