The Reserve Bank of India (RBI) intervened in the foreign exchange market through dollar sales, causing the rupee to settle flat against the dollar and hover near its all-time closing low. The rupee was negatively impacted by a number of factors, including as outflows from domestic equities, rising crude oil costs, and an increasing dollar index.
In order to guard against the 84 per dollar threshold, the RBI was in the market today. Because of global uncertainties and (market) anxiety, the dollar is getting stronger. In other news, as US Treasury yields rose in reaction to expectations of a 50 basis point rate hike being tempered by strong US jobs statistics, dollar-rupee forward premiums fell by 11 basis points to 2.27 percent.
An increase in foreign currency assets helped India’s foreign exchange reserves rise sharply, surpassing $700 billion in the week ending September 27. At $704.88 billion, total reserves increased by $12.58 billion, which was the fifth-highest weekly rise in foreign reserves. Revaluation gains and dollar purchases by the RBI from the spot market contributed to the $10.46 billion growth in foreign currency assets during this time.