“The rupee’s near-record weakness forced our hand,” said a senior banking official familiar with the intervention. Last Friday, the Reserve Bank of India unloaded about $7 billion to shore up the rupee, which had been sliding fast toward its May low. The currency had dropped almost 6% in 2026, hitting 95.6 per dollar before the central bank stepped in.
This aggressive move was one of the largest direct market interventions by the RBI in recent months, according to multiple sources. The bank sold dollars in both onshore and offshore markets as the rupee inched closer to the record low of 96.96, signaling serious concern over currency stability. Some bankers estimated the actual sales to be as high as $9 billion, with follow-up efforts pushing the rupee just past 96 per dollar early this week.
India’s foreign exchange reserves, meanwhile, have grown steadily and stood at $676.2 billion as of July 17 a $9 billion increase over three weeks. This buffer suggests the RBI still has significant firepower to defend the rupee if needed. It’s a continuation of a trend: the central bank sold nearly $10 billion in March, $9 billion in April, and $6 billion in May while purchasing billions to manage volatility.
Strategic moves beyond dollar sales, like policy tweaks aimed at attracting foreign capital, seem to be paying off. Foreign investors snapped up $1.3 billion of Indian equities in the week through July 9, marking the largest inflow since mid-2025. Analysts at Goldman Sachs expect these combined efforts, along with easing oil prices, to provide some relief for the rupee. Still, much depends on external factors like global oil markets and sustained foreign inflows.
This article is for informational purposes only and does not constitute financial advice.
