The Reserve Bank of India (RBI) is believed to have undertaken dollar-selling operations through public sector banks to prevent the rupee from reaching a record low against the US dollar.
As per the latest reports, the rupee was quoted at 83.0250 against the US dollar, marking a 0.1% decline from the previous session. The currency had briefly dropped to 83.16 on the interbank order matching system before the regular over-the-counter (OTC) opening time of 9:00 a.m.
It is speculated that the RBI‘s intervention involved selling dollars to stabilize the rupee’s value near the 83 level.
“The RBI wants to prevent volatility and one-sided moves in the rupee,” explained Ritesh Bhusari, Deputy General Manager for Treasury at private sector lender South Indian Bank. He further commented that with the RBI’s involvement in the forex market, it might be challenging for the rupee to depreciate below 83.25.
The rupee’s historical low stands at 83.29, which was recorded in October of the previous year.
While analysts previously anticipated a weakening trend for the rupee due to factors like fluctuations in the dollar and other Asian currencies, the RBI’s intervention is expected to moderate the pace of depreciation.
According to a senior trader from a private sector bank, the RBI’s recent actions suggest that they aimed to swiftly quash any expectations of the rupee reaching a record low. This intervention reflects the central bank’s commitment to maintaining stability and managing market sentiment.
Note: The information provided here is based on available data and should not be considered as financial advice. Always refer to authoritative sources and consult with financial professionals before making investment decisions.