RBI Warns Rupee Pressure, Eyes Market Intervention

RR Team

2 months ago

NEW DELHI: The Reserve Bank of India (RBI) has signaled that the rupee is currently under speculative attack and confirmed it will intervene further to stabilize the currency amid growing market volatility. Analysts note that global pressures and capital flow fluctuations are driving the current depreciation.

Speaking on the rupee’s recent performance, RBI sources indicated that the central bank remains vigilant and prepared to deploy market tools to prevent disorderly movements. The rupee has faced downward pressure in recent weeks due to a combination of foreign exchange outflows and rising oil import costs.

Financial markets reacted cautiously to the announcement, with the forex market showing heightened volatility. Experts say that RBI intervention could include forward sales, spot purchases, and other liquidity measures to manage the currency’s stability.

The central bank’s proactive stance reflects India’s commitment to protecting the domestic economy from speculative pressures. RBI Governor’s office reiterated that intervention will be calibrated to ensure orderly market conditions without causing unnecessary disruption.

Market analysts suggest that while short-term volatility may persist, RBI measures are likely to stabilize the rupee over the medium term. Corporates, importers, and exporters are advised to hedge currency risks in anticipation of potential fluctuations.

The rupee’s movement is also influenced by global macroeconomic factors, including US Federal Reserve policies, dollar strength, and commodity prices. Investors are closely monitoring RBI’s actions to gauge the trajectory of the currency in coming months.