Rupee Rebounds After RBI’s Aggressive Intervention In Currency Markets

The Reserve Bank of India (RBI) has reportedly stepped up efforts to defend the rupee amid recent weakness driven by speculative attacks.

According to an article by Bloomberg, the RBI is actively intervening in both onshore and offshore markets to stabilize the currency, which had been hovering near record lows of 88.805 per US dollar. The central bank is determined to prevent the rupee from breaching the psychologically significant ₹89 - ₹90 level, which could trigger further volatility.

The rupee briefly gained nearly 1% after RBI intervention on Wednesday. Heavy-dollar sales through state-run banks before market open prompted traders to unwind bearish bets, fueling the currency’s rebound.

The article states that analysts noted that the ₹88.50 mark had served as a key stop-loss level for speculators, and the central bank’s actions have forced both local and offshore investors to adjust positions.

Rupee closed at 88.04 on Wednesday.

The RBI views the rupee’s decline as largely speculative rather than tied to economic fundamentals. Despite trade uncertainties between India and the U.S., including tariffs imposed by the Trump administration, India’s economy remains resilient, with growth expected above 6.5% and inflation under control.

With reserves of $700 billion, the RBI has significant firepower to counter further speculative pressure. Officials stress that interventions will continue until the market recognizes the central bank’s resolve.

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