RBI Sells Dollars Aggressively, Lifting Rupee Near 96 After 2.5% Nine-Day Slide
Updated
Updated · Reuters · May 21
RBI Sells Dollars Aggressively, Lifting Rupee Near 96 After 2.5% Nine-Day Slide
11 articles · Updated · Reuters · May 21
Heavy pre-market dollar sales via state-run banks drove the Rupee up about 70 paise within minutes, lifting it near 96 after it had come within a whisker of 97 a day earlier.
The Reserve Bank of India reverted to a strategy it last used in March after steady intervention across recent sessions failed to stop repeated record lows and a roughly 2.5% drop over nine sessions.
Bankers said the sharp rebound suggests speculative positions had built up, prompting the central bank to act forcefully before the onshore spot market opened at 96.30, up 0.5% on the day.
Oil-price gains tied to the Iran war and higher U.S. yields are still pressuring the rupee by worsening India's import bill, inflation outlook and risk of equity outflows.
That backdrop has pushed the RBI to weigh broader defenses, with earlier reports saying officials were also considering steps including a rate hike, swaps and raising dollars from investors.
Can India’s central bank stabilize the rupee without derailing its economic growth?
As India taps crisis-era tools, how will the rupee's plunge impact foreign investment?