MUMBAI (Diya TV) — The Reserve Bank of India (RBI) sold about $7 billion in the foreign exchange market last Friday to support the Indian rupee after fresh pressure pushed the currency closer to a record low.
The move marked one of the RBI’s biggest direct currency interventions in recent months. It also showed the central bank’s strong commitment to limiting sharp swings in the rupee. Soon after Friday’s action, the RBI continued selling dollars over the next two trading sessions. As a result, the rupee recovered some of its recent losses and moved farther away from its all-time low.
The Indian rupee traded at 95.7437 against the U.S. dollar on Thursday. Even so, the currency remained about 1.3% above its weakest level on record. However, the RBI’s intervention helped improve market confidence and reduced immediate pressure on the currency.
Higher global crude oil prices created fresh challenges for India and several other Asian economies. India imports most of its crude oil, so rising prices increase demand for U.S. dollars. Consequently, the added demand often puts pressure on the rupee. At the same time, investors closely watched central banks across the region as they responded to growing market volatility.
Last Friday, Taiwan’s central bank also increased its efforts to stabilize its currency. Reports said the authority asked some banks to withdraw orders to buy U.S. dollars. Meanwhile, the Philippine central bank also stepped into the market in a limited way to support the peso.
The RBI’s recent actions came at a time when India strengthened its foreign exchange reserves. Over the past several weeks, the central bank introduced measures to attract more foreign capital into the country. Those efforts increased the RBI’s financial resources and gave policymakers more flexibility to manage currency movements.
RBI Governor Sanjay Malhotra recently said banks had already mobilized about $32 billion following the new measures. He shared the update during an interview with The Hindu Business Line. The strong response highlighted investor interest and helped reinforce India’s foreign currency position.
India’s foreign exchange reserves reached $676.2 billion as of July 17. The total rose by more than $9 billion over the previous three weeks. The larger reserve balance gives the RBI greater ability to supply dollars when market conditions become volatile. It also strengthens confidence in India’s ability to manage external financial risks.
Central banks usually avoid targeting a fixed exchange rate. Instead, they focus on maintaining orderly market conditions and preventing sudden price movements that could disrupt trade or investment. Therefore, the RBI’s recent dollar sales reflected its broader effort to support financial stability rather than set a specific value for the rupee.
