RBI spent ₹2.7 lakh cr to prevent rupee from falling, it still fell to record lows: Report
The Indian rupee has been on a downward spiral for quite some time now, and the Reserve Bank of India (RBI) has been trying to intervene to soften the fall. According to a report by SBI Research, the RBI spent around ₹2.7 lakh crore ($30 billion) to help prevent the rupee from falling further over the past few months. However, despite the central bank’s best efforts, the rupee continued to tumble to new record lows.
The report by SBI Research stated that the RBI has intervened around $18 billion in the forex market during the period of June-September, and an estimated $10 billion in October 2025. This massive intervention by the RBI was aimed at stabilizing the rupee and preventing it from falling further. However, the rupee continued to decline, reaching new record lows against the US dollar.
The decline of the rupee has been a major concern for the Indian economy, as it makes imports more expensive and increases the cost of borrowing for companies. A weaker rupee also makes it more difficult for Indian companies to compete in the global market, as their products become more expensive for foreign buyers.
The RBI’s intervention in the forex market is aimed at preventing a sharp decline in the value of the rupee. The central bank sells dollars in the market to reduce the supply of rupees and increase the demand for dollars, which helps to stabilize the exchange rate. However, the RBI’s intervention is not a long-term solution to the problem, and the rupee’s decline is a reflection of the underlying economic fundamentals.
The SBI Research report noted that the RBI’s intervention has been significant, but it has not been enough to stem the decline of the rupee. The report stated that the RBI has been intervening in the forex market to prevent a sharp decline in the value of the rupee, but the decline has been gradual and consistent.
The decline of the rupee has been attributed to a number of factors, including the strengthening of the US dollar, the trade deficit, and the outflow of foreign investment from India. The US dollar has been strengthening against most major currencies, including the rupee, due to the hawkish stance of the US Federal Reserve. The trade deficit has also been a major concern, as India’s imports have been increasing faster than its exports.
The outflow of foreign investment from India has also been a major factor contributing to the decline of the rupee. Foreign investors have been pulling out of the Indian market due to concerns about the country’s economic fundamentals, including the high current account deficit and the slow pace of economic reform.
The RBI’s intervention in the forex market has been significant, but it is not a sustainable solution to the problem. The central bank cannot intervene indefinitely, and the rupee’s decline is a reflection of the underlying economic fundamentals. The government needs to take steps to address the underlying issues, including the trade deficit and the outflow of foreign investment.
The decline of the rupee has significant implications for the Indian economy. A weaker rupee makes imports more expensive, which can lead to higher inflation. It also makes it more difficult for Indian companies to compete in the global market, as their products become more expensive for foreign buyers.
The government needs to take steps to address the decline of the rupee, including reducing the trade deficit and increasing foreign investment. The government can reduce the trade deficit by increasing exports and reducing imports. The government can also increase foreign investment by improving the business environment and reducing regulatory hurdles.
In conclusion, the RBI’s intervention in the forex market has been significant, but it has not been enough to stem the decline of the rupee. The decline of the rupee is a reflection of the underlying economic fundamentals, and the government needs to take steps to address the underlying issues. The government needs to reduce the trade deficit, increase foreign investment, and improve the business environment to address the decline of the rupee.
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