RBI's $1 Billion Daily Dollar Sales Fail to Stop Rupee Near 97 as Oil, US Yields Climb
Updated
Updated · Reuters · May 20
RBI's $1 Billion Daily Dollar Sales Fail to Stop Rupee Near 97 as Oil, US Yields Climb
2 articles · Updated · Reuters · May 20
$1 billion in estimated daily RBI intervention has only slowed the rupee's fall, with the currency on a nine-day losing streak and nearing 97 per dollar for the first time.
High oil prices and surging U.S. Treasury yields are driving the pressure, as markets now price possible Fed hikes tied to Iran war-linked inflation risks.
Bankers put recent RBI spot-market dollar sales at $800 million to $2 billion a day, with one economist estimating about $5 billion was sold in the first week of May.
FX flows remain skewed against the rupee: exporters are delaying conversions, importers are front-loading dollar demand and hedging, while capital inflows stay subdued.
The rupee is down nearly 8% this year—Asia's worst performer—and traders say the RBI is now focused on preventing a disorderly slide rather than reversing it.
With its hidden debt growing, is India's central bank running out of firepower to defend the rupee from its historic plunge?
As a Mideast conflict fuels its currency crisis, is India's economy headed for a perfect storm of stagflation?