RBI's record intervention: $7 billion in a single day to save the rupee
The Reserve Bank of India (RBI) conducted a massive currency intervention, selling approximately $7 billion last Friday. This unprecedented measure was aimed at supporting the national currency, which was teetering on the brink of an all-time low.
As of today, the rupee is trading at 95.6 against the US dollar, roughly 1.4% above the critical level of 96.96 recorded in May this year. However, since the beginning of 2026, the Indian currency has already lost 5.87% of its value against the dollar. This aggressive intervention by the regulator — the largest in recent months — was a response to increased pressure.
The Double-Impact Mechanism
The RBI acted not only in the domestic market but also in the external foreign exchange market. According to bankers' estimates, the sales volume could have been even higher — up to $8–9 billion. Subsequent operations on Monday and Tuesday helped bring the exchange rate back above the 96 rupees per dollar mark. Notably, India's foreign exchange reserves as of July 17 stood at $676.2 billion, having increased by more than $9 billion over three weeks. This provides the regulator with a powerful "firepower reserve" to continue interventions.
This intervention was part of a series of large-scale sales. In March, the net volume of currency sold was $9.76 billion, in April — $8.94 billion, and in May — $6.1 billion. Notably, in May, the RBI bought $22.2 billion but sold $28.3 billion, demonstrating a net dollar outflow.
Beyond Dollars: A Comprehensive Approach
The regulator did not limit itself to direct sales. Additional steps were taken to attract capital, which are already yielding results: in the week leading up to July 9, foreign funds purchased $1.3 billion worth of Indian stocks — a record figure since June 2025. Goldman Sachs analysts predict that the combination of RBI measures and falling oil prices will provide additional support for the rupee.
My view as an analyst: The rupee's stability in the near term will critically depend on two factors: the dynamics of energy prices and the inflow of foreign capital. The growth of RBI's reserves inspires optimism, but fundamental pressure on the currency persists. As long as the regulator demonstrates a willingness to spend billions, the market will perceive this as a signal that the "bottom" for the rupee has not yet been reached, and volatility will remain high.