India’s Rupee Advances Most In Asia After RBI Intervenes In Currency Markets

The Indian rupee rose by as much as 0.7% to 91.5112 per U.S. dollar on Thursday after the Reserve Bank of India intervened in currency markets, according to Reuters. The move followed a record low recorded by the currency in the previous trading session.

Market participants indicated that the central bank sold U.S. dollars in both onshore and offshore markets to support the domestic currency. The intervention helped the rupee post the strongest gain among Asian currencies during the session, Reuters reported.

RBI Intervention In Forex Markets

The rupee’s gain came after the central bank reportedly sold the greenback in both the domestic market and the offshore non-deliverable forwards market. According to Reuters, the intervention occurred after the currency weakened significantly earlier in the week.

The rupee had been under pressure in recent trading sessions. Data cited by Reuters showed that the currency declined by more than 1% over the previous two trading days before Thursday’s recovery.

The intervention by the Reserve Bank of India took place alongside easing global indicators during the session. Reuters reported that crude oil prices stabilised and the U.S. dollar index softened during the day, contributing to improved sentiment in currency markets.

Pressure On Rupee In Recent Sessions

The Indian currency faced pressure following global geopolitical developments and volatility in commodity prices. Reuters reported that rising energy prices increased concerns about India’s trade deficit and inflation, which can affect currency movements.

Earlier in the week, the rupee erased gains it had recorded after a trade agreement between India and the U.S. in early February. The losses over the previous sessions pushed the currency to a record low before the central bank stepped in, according to Reuters.

The currencies in emerging economies may be affected by movements in commodity prices in the world and changes in the value of the U.S. dollar. In India’s case, movements in oil prices and capital flows may have implications for the demand for its currency.

The intervention on Thursday helped the rupee recover from recent declines and stabilise after reaching its lowest level in the previous trading session, according to Reuters.