India’s central bank, the Reserve Bank of India (RBI), took action to prevent the rupee from sliding to a historic low, according to reports from four traders interviewed by Reuters. The currency market had been closely monitoring the rupee’s performance, with concerns that it might reach a record low.
As of the time of the report, the USD/INR exchange rate was at 83.2425, which was perilously close to the record low of 83.29. Interestingly, before the standard over-the-counter market opening at 9:00 a.m., the USD/INR had already reached 83.3050 on the interbank order matching system.
Traders noted that the RBI needed to assert its presence just before the market opening to prevent a substantial upside movement in USD/INR. Subsequently, there was a slight retracement, indicating a significant demand for the U.S. dollar in the market.
The central bank’s intervention demonstrates its commitment to safeguarding the stability of the rupee and preventing it from reaching historically low levels, which could have broader implications for the Indian economy. The evolving dynamics of the currency market will continue to be a point of interest for traders and investors alike.