Indian Rupee: RBI support as INR nears record low against US Dollar – BNY

BNY’s Geoff Yu reports that the Reserve Bank of India (RBI) has intervened onshore and offshore to support the Indian Rupee (INR) as USD/INR trades close to its all‑time high. Authorities are also easing rules to attract foreign currency inflows, but stronger importer US Dollar (USD) demand and higher Oil prices are offsetting these efforts. Bond yields have risen alongside currency pressure.

FX intervention and policy tweaks in focus

"The RBI has intervened in foreign exchange markets to support the rupee after it slipped toward a record low, selling dollars both onshore and offshore as oil prices surged and pressured sentiment."

"Authorities have also tried to attract foreign currency inflows by easing rules for domestic bond investment and encouraging dollar deposits from non-resident Indians, but the recent measures have not fully offset stronger importer demand for dollars and higher crude driven external pressure."

"The currency fell as 0.2% to 96.4575 per dollar, close to the all-time low of 96.965 reached in late May, while benchmark 10y government bond yields rose 4 basis points to 6.82%."