The Reserve Bank of India likely intervened in the foreign exchange market on Tuesday to support the rupee. Traders said state-run banks sold dollars to help the currency recover from recent lows. The central bank also used sell/buy swaps to drain excess cash from the banking system on that day.
The Reserve Bank of India likely intervened in the foreign exchange market on Tuesday via dollar sales to support the rupee and dollar-rupee sell/buy swaps aimed at draining excess cash, four traders told Reuters.
The rupee was last at 96.41 per dollar, recovering marginally from its over two-month low of 96.43 in early trading.
State-run banks were spotted offering dollars, most likely on behalf of the RBI, traders said.
The RBI was also likely conducting dollar-rupee sell/buy swaps to drain excess cash from the banking system, the traders added.
Dollar-rupee forward premiums rose in response, with the June 2027 forward premium up eight paisa at ₹2.56.