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 in recent months, reaching record lows against the US dollar. In an effort to stabilize the currency and prevent it from falling further, the Reserve Bank of India (RBI) has spent a significant amount of money. According to a report by SBI Research, the RBI has spent around ₹2.7 lakh crore ($30 billion) to help soften the fall of the Indian rupee over the past few months.
The report states that the RBI has intervened in the forex market to the tune of $18 billion during the period of June-September. Additionally, it is estimated that the central bank has spent another $10 billion in October 2025, taking the total expenditure to $30 billion. This massive intervention by the RBI is aimed at preventing the rupee from falling further and maintaining stability in the foreign exchange market.
Despite the RBI’s best efforts, the rupee has continued to tumble to new record lows. The currency has been under pressure due to a combination of factors, including a strong US dollar, rising crude oil prices, and a widening trade deficit. The RBI’s intervention in the forex market has helped to slow down the decline of the rupee, but it has not been able to halt it entirely.
The SBI Research report highlights the challenges faced by the RBI in maintaining the stability of the rupee. The report notes that the RBI has been selling dollars in the forex market to prevent the rupee from falling further. However, this has resulted in a depletion of the country’s foreign exchange reserves. The report estimates that the RBI’s intervention in the forex market has resulted in a decline of $28 billion in the country’s foreign exchange reserves during the period of June-September.
The decline of the rupee has significant implications for the Indian economy. A weak 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 exports become more expensive. The decline of the rupee has also led to a rise in the cost of borrowing for Indian companies, as they have to pay more to service their foreign currency loans.
The RBI’s intervention in the forex market is a short-term measure to stabilize the rupee. However, it is not a long-term solution to the country’s economic problems. The government needs to take steps to address the underlying issues that are contributing to the decline of the rupee. This includes reducing the country’s trade deficit, increasing foreign investment, and promoting exports.
In recent months, the government has taken several steps to boost exports and reduce the trade deficit. These include the introduction of new export incentives, the reduction of import duties on certain goods, and the promotion of foreign investment. However, more needs to be done to address the underlying issues that are contributing to the decline of the rupee.
In conclusion, the RBI’s intervention in the forex market has helped to slow down the decline of the rupee, but it has not been able to halt it entirely. The decline of the rupee has significant implications for the Indian economy, and the government needs to take steps to address the underlying issues that are contributing to it. The RBI’s expenditure of ₹2.7 lakh crore to prevent the rupee from falling is a significant amount, and it highlights the challenges faced by the central bank in maintaining the stability of the currency.
The RBI’s efforts to stabilize the rupee are ongoing, and it is likely that the central bank will continue to intervene in the forex market in the coming months. However, it is also important for the government to take steps to address the underlying issues that are contributing to the decline of the rupee. This includes promoting exports, reducing the trade deficit, and increasing foreign investment. Only then can the rupee be stabilized, and the Indian economy can achieve long-term growth and stability.
News Source: https://www.cnbctv18.com/market/currency/india-rupee-how-many-us-dollars-did-rbi-buy-ws-l-19794895.htm/amp
About the Author
