What prompted the RBI to intervene in the foreign exchange market?

The RBI intervened due to the rupee’s rapid depreciation, driven by rising oil prices, geopolitical tensions in the Middle East, and sustained foreign portfolio investment outflows. The central bank aimed to curb speculative trading and stabilize the currency.

What measures did the RBI take to support the rupee?

The RBI barred banks from offering rupee non-deliverable forwards to resident and non-resident clients and tightened limits on banks’ FX positions in the onshore market. These measures increased the cost of betting against the rupee.

Is the rupee’s recent recovery sustainable?

The sustainability of the recovery depends on several factors, including the trajectory of oil prices, the pace of FPI outflows, and the overall global economic environment. Continued volatility is expected in the near term.

What prompted the RBI to intervene in the foreign exchange market?

The RBI intervened due to the rupee’s rapid depreciation, driven by rising oil prices, geopolitical tensions in the Middle East, and sustained foreign portfolio investment outflows. The central bank aimed to curb speculative trading and stabilize the currency.

What measures did the RBI take to support the rupee?

The RBI barred banks from offering rupee non-deliverable forwards to resident and non-resident clients and tightened limits on banks’ FX positions in the onshore market. These measures increased the cost of betting against the rupee.

Is the rupee’s recent recovery sustainable?

The sustainability of the recovery depends on several factors, including the trajectory of oil prices, the pace of FPI outflows, and the overall global economic environment. Continued volatility is expected in the near term.

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