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RBI fighting on several fronts to slow rupee's decline to fresh records

The rupee closed down 0.3% to 78.97 a dollar on Wednesday, extending this year's losses to 5.9%. RBI's stated stance is that it intervenes to curb currency volatility

Indian Rupee, Rupee, Currency
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India’s central bank is fighting on several fronts to slow the rupee’s decline to fresh records, with little respite in sight.

Subhadip Sircar and Ronojoy Mazumdar | Bloomberg
India’s central bank is fighting on several fronts to slow the rupee’s decline to fresh records, with little respite in sight.
 
The Reserve Bank’s challenges include crashes in forward dollar premiums to rising open interest in futures that adds to pressure on the currency. Strategists say that the pressure will continue amid shrinking interest rate differentials with the US, elevated oil prices fueling domestic inflation and a widening trade deficit.

“The RBI has been intervening in all markets to defend the rupee,” said Dhiraj Nim, economist and FX strategist at Australia & New Zealand Banking Group Ltd. “The

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First Published: Jun 30 2022 | 6:51 AM IST

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