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 over the past few months, and the Reserve Bank of India (RBI) has been actively trying to stem the fall. According to a report by SBI Research, the RBI spent around ₹2.7 lakh crore ($30 billion) to help soften the fall of the Indian rupee. Despite the central bank’s intervention, the rupee continued tumbling to new record lows.
The report by SBI Research stated that the RBI has intervened around $18 billion in the forex market during June-September, and an estimated $10 billion in October 2025. This massive intervention by the RBI was aimed at preventing the rupee from falling further, but it seems to have had limited success. The rupee has been under pressure due to a combination of factors, including a strong US dollar, high crude oil prices, and a widening trade deficit.
The RBI’s intervention in the forex market is aimed at managing the supply of foreign exchange and preventing excessive volatility in the currency market. The central bank buys or sells dollars to influence the exchange rate and prevent the rupee from falling too sharply. However, the report by SBI Research suggests that the RBI’s efforts have not been enough to stem the fall of the rupee.
The rupee has been falling steadily over the past few months, and it has reached new record lows. The currency has been under pressure due to a combination of domestic and international factors. The strong US dollar has been a major factor, as it has made imports more expensive and reduced the competitiveness of Indian exports. The high crude oil prices have also added to the pressure on the rupee, as India is a major importer of oil.
The widening trade deficit has also been a major concern for the RBI. The trade deficit has been increasing over the past few months, and it has reached a record high. The trade deficit is the difference between the value of exports and imports, and a widening trade deficit can put pressure on the currency. The RBI has been trying to manage the trade deficit by intervening in the forex market and by implementing policies to boost exports.
The report by SBI Research has raised concerns about the effectiveness of the RBI’s intervention in the forex market. The report suggests that the RBI’s efforts have not been enough to stem the fall of the rupee, and it has raised questions about the sustainability of the central bank’s intervention. The RBI has been using its foreign exchange reserves to intervene in the market, and the report suggests that the central bank may not have enough reserves to continue intervening at the current level.
The fall of the rupee has significant implications for the Indian economy. A weak currency can make imports more expensive, which can lead to higher inflation. It can also reduce the competitiveness of Indian exports, which can lead to a decline in export growth. The fall of the rupee can also affect the value of foreign investments in India, as a weak currency can reduce the value of investments.
The RBI’s intervention in the forex market is aimed at managing the risks associated with a weak currency. The central bank is trying to prevent the rupee from falling too sharply, as it can have significant implications for the economy. However, the report by SBI Research suggests that the RBI’s efforts may not be enough to stem the fall of the rupee, and it has raised concerns about the sustainability of the central bank’s intervention.
In conclusion, the RBI spent around ₹2.7 lakh crore ($30 billion) to help soften the fall of the Indian rupee over the past few months, but it still fell to record lows. The report by SBI Research has raised concerns about the effectiveness of the RBI’s intervention in the forex market, and it has raised questions about the sustainability of the central bank’s intervention. The fall of the rupee has significant implications for the Indian economy, and the RBI will need to continue to intervene in the market to manage the risks associated with a weak currency.
News Source: https://www.cnbctv18.com/market/currency/india-rupee-how-many-us-dollars-did-rbi-buy-ws-l-19794895.htm/amp
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