RBI dive in forex markets keeps rupee from sinking below 80


The Reserve 

Bank of India’s (RBI) calibrated and timely interventions in the foreign-exchange markets ensured the rupee stayed within the 80 mark to the US dollar, which has surged unexpectedly against all world currencies since global central banks began rowing back on monetary accommodation.

The psychologically important level was breached in the over-the-counter and derivative markets on Thursday, but spot trades on the rupee reflect the combined impact of robust North Block-Mint Road coordination and expectations of 5G-linked fund inflows, dealers said.

“In the past two years, the RBI in consultation with the ministry of finance has built large external buffers in the form of foreign reserves for precisely such a scenario,” a top market source told ET. “Their management o ..

The rupee was little changed on Friday at 79.88 per dollar, ranking as the fifth best performing Asian currency. The local unit has shed nearly 7.5% in six months.

Quantum of $ Sales

It has, however, outperformed when judged against the surge in the Dollar Index, which measures the unit against other major currencies. “Given that the dollar is strengthening, a stronger rupee against other currencies may not entirely be desirable as a deliberate policy choice,” the person cited above said.

The Dollar Index gained about 12.5% this calendar year as international investors have sought the safety of dollar-backed assets amid chances of sharper rate increases by the US Fe ..


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