India’s RBI urges banks to avoid rupee speculation

The Reserve Bank of India (RBI) advised both state-run and private lenders to avoid excessive speculation against the rupee to stabilise the currency, according to four sources said.

The RBI communicated this message informally to bankers on Monday as the rupee has been close to hitting a record low of 83.9850 per US dollar.

The RBI advised banks to refrain from making significant bets against the rupee, according to a senior banker at a private bank. This guidance is considered a form of “oral intervention” by the central bank.

The sources, who requested anonymity, mentioned that the news has not been previously disclosed. The RBI has not yet responded to a request for comment. Reuters was unable to confirm the complete list of banks contacted by the RBI.

The central bank occasionally intervenes to support the rupee through moral suasion, with the most recent instance occurring in early August.

Attribution: Reuters

Subediting: M. S. Salama