The Reserve Bank of India has moved to more sustained FX intervention over the
past month to support the rupee, sources said, after measures launched in June
to attract dollar funds brought roughly $73bn of inflows. In one action, when
the rupee neared record lows the central bank used about $7bn in domestic and
offshore markets in a single day. Reserves are now above $700bn, giving the RBI
more room to offset oil-price pressure, but investors remain unconvinced the
rupee is undervalued, leaving doubt whether larger interventions will be
sufficient. BNP Paribas SA strategist Chandresh Jain said the RBI’s primary aim
is to curb volatility and the speed of two-way moves rather than to
fundamentally alter the exchange rate trend.
