The Reserve Bank of India is selling USD to curb volatility in USD/INR, though the pair remains steady near all-time highs.
The Reserve Bank of India is reportedly selling US dollars to stabilize the rupee, though USD/INR has shown little movement despite the intervention. The central bank’s approach focuses on smoothing volatility rather than targeting a specific exchange rate, particularly when the pair nears record levels above 96.8.
USD/INR has traded in the mid-to-high 95 range recently, reflecting persistent depreciation pressures. These include elevated oil prices, foreign portfolio outflows from Indian equities, and geopolitical tensions over US tariffs linked to India’s Russian oil imports. The rupee has underperformed most Asian currencies this year.
Analysts suggest the RBI’s current strategy aims to contain losses rather than reverse them. A sustained pullback in oil prices or a broader dollar downtrend may be needed for the rupee to strengthen meaningfully from current levels.