Ten months into his tenure, RBI Governor Sanjay Malhotra has made it clear that while the rupee will be allowed some flexibility, speculative traders could face tough resistance. The currency jumped nearly 1% on Wednesday after the central bank intervened in both offshore and onshore markets, forcing short sellers to unwind positions. This move halted talks of the rupee slipping past its record low of 88.80 per dollar, with it trading around 87.93 on Thursday.
Analysts said the RBI’s action signals a readiness to step in decisively when needed, supported by India’s strong economy, low inflation, and $700 billion in reserves. Market experts expect further gains, with MUFG predicting 87 and Kotak Mahindra Bank seeing a range of 87.50–89. The intervention, similar to one in February, seems aimed at curbing one-way speculative bets.
The rupee’s rebound also coincides with optimism around a potential India–US trade deal, which some believe the RBI’s move helps reinforce. However, economists view the action as a strategic one-time measure rather than a return to tight currency control.
