Indian Central Bank Intervenes to Support Rupee
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Loading... - Isha Dabral
- 12 Sep 2024
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The Reserve Bank of India (RBI) is likely selling U.S. dollars to support the rupee, according to five traders who spoke to Reuters. The intervention aims to maintain the rupee above the key support level of 84.
The rupee was trading at 83.97 per U.S. dollar, compared to its previous close at 83.9775. Although the local currency had reached an all-time low of 83.9850 last week, the RBI's intervention has helped stabilize it.
State-run banks were seen offering dollars in "small lots" near 83.97-83.98 levels, likely on behalf of the RBI. This is not an isolated incident, as the RBI has regularly intervened to support the rupee near these levels over the past month.
The intervention comes amid a broader decline in Asian currencies, triggered by resilient U.S. inflation data. The data has reduced hopes of a 50-basis-point rate cut by the Federal Reserve next week, leading to a strengthening of the U.S. dollar.
The RBI's intervention highlights its commitment to maintaining the rupee's stability, particularly in times of global market volatility. As the central bank continues to support the rupee, it will be essential to monitor its impact on the Indian economy and the broader currency market.
