RBI on the Indian Rupee

Over the past few months, the rupee has depreciated significantly against the U.S. dollar, touching record lows multiple times. This decline could have had negative effects on the economy, so the RBI intervened to stabilize the situation.

What Did the RBI Do?

To keep the rupee stable and prevent its fall against the dollar, the RBI sold 7.7 billion dollar in August. According to the latest RBI data, this sale was almost three times higher than in July. In both July and August, the RBI did not purchase any dollars it only sold them.

The RBI clarified that it does not aim to maintain the rupee at a fixed level but intervenes in the market when there is excessive volatility to ensure stability. A sharp fall in the rupee was observed in August.

Decline Continued in September

In September, the rupee continued to weaken due to global economic uncertainties, rising trade tensions, and foreign investor sell-offs. However, on October 20, foreign investor buying and a drop in crude oil prices helped the rupee register a slight gain of 9 paise, closing at 87.93 Rs against the U.S. dollar.

During the day, the rupee traded between 87.74 and 87.94 Rs. On the previous Friday, it had closed at Rs 88.02.

Meanwhile, the U.S. dollar index inched up slightly to 98.53, and Brent crude oil prices fell by around 0.36% to $61.07 per barrel.