Turnaround hopes for rupee fade over RBI's stance on forex reserves

The rupee is under pressure to rise on heavy foreign inflows

Bets on the Indian rupee’s rebound this year are already facing headwinds.

The Reserve Bank of India signaled recently it won’t relent on dollar purchases that pushed the currency to the bottom of Asia’s currency rankings in 2020. Analysts had forecast for the rupee to rise for the first time in four years on hopes the RBI may slow its foreign-currency accumulation after the stockpile rose to a record.

The RBI’s comments suggest “the large FX intervention that the central bank undertook in 2020 totaling almost $120 billion will continue in 2021,” said Khoon Goh, head of research at Australia