RBI | Rupee RBI may have sold $2 bn to control fluctuations in rupee: Report
The Reserve Bank of India (RBI) is estimated to have offloaded $2 billion in the local currency market to control wild fluctuations in the exchange rate, the biggest central bank intervention in the aftermath of Ukraine-Russia war, ET reported citing market sources.
Market sources told ET that large public sector banks and private banks sold dollars on behalf of the RBI both in the spot market, and through GIFT City branches.
Rupee lost as much as 0.70 percent Wednesday under the shadow of zooming crude oil prices and Russia-Ukraine conflict, ranking lowest among Asian peers.
The local unit closed at 75.71, about half a percent weaker than Monday’s closing, Bloomberg data compiled by ETIG showed.
Brent crude surged to $112 per barrel Wednesday, its eight-year high, as geopolitical situation worsened and lower supply fuelled apprehensions.
Banks sell dollars and buy rupees to tighten liquidity in the system.
The move also helps to curb consumer price increases at a time when India, the second largest oil user globally, dishes out more money to import it, and eventually passes it on to the end user.
This year till now, the rupee lost 1.82 percent to the US dollar, making it the worst performing Asian currency.
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