Why did the RBI intervene to support the Indian Rupee?

The RBI intervened to disrupt one-way moves and support the rupee's value, which had fallen about 1% in the preceding two weeks.

What is the current status of the Indian Rupee after RBI intervention?

The Indian Rupee ended higher for the second consecutive session, closing 0.3% higher at 89.88, its highest level in a week.

What are the future predictions for the Indian Rupee?

Goldman Sachs forecasts the rupee to remain range-bound, around 89.50 in three months and 91 in six months, as the RBI rebuilds reserves.

Home / Business and Economy / RBI Defends Rupee: Intervention Pushes Currency Higher

RBI Defends Rupee: Intervention Pushes Currency Higher

7 Jan

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Summary

RBI intervened to support the rupee, pushing it past 90 per dollar.
The rupee ended 0.3% higher, marking its highest close in a week.
Goldman Sachs predicts rupee to be range-bound as RBI rebuilds reserves.

RBI Defends Rupee: Intervention Pushes Currency Higher

The Reserve Bank of India (RBI) once again intervened in the foreign exchange market on Wednesday, employing tactics similar to those used frequently last year. This intervention, which traders suggest was conducted through state-run banks, aimed to disrupt one-way currency movements and support the Indian rupee's value.

The Indian rupee closed 0.3% higher at 89.88 against the US dollar on Wednesday, its strongest closing level in a week. This recovery reversed earlier pressure stemming from softer Asian market cues, although the local currency had faced headwinds from persistent foreign equity selling and trade deal uncertainties.

Analysts at Goldman Sachs foresee the rupee remaining range-bound. They expect that resilient macroeconomic fundamentals and improved capital flows, contingent on easing US trade uncertainty, will alleviate pressure. However, they anticipate the RBI will continue to rebuild its foreign exchange reserves, projecting the currency at approximately 89.50 in three months and 91 in six months.