Summary:
Traders say RBI likely sold US dollars before local market open.
Rupee strengthened.
Intervention reportedly conducted via large state-run bank.
Move surprised market participants.
Action occurred just before 9:00 a.m. IST spot open
India’s central bank is believed to have stepped into currency markets ahead of Thursday’s local trading session, helping the rupee open stronger than expected, according to traders cited by Reuters.
Six market participants said the Reserve Bank of India likely sold U.S. dollars before the domestic spot market opened at 9:00 a.m. IST. The intervention appeared to catch traders off guard and contributed to a firmer start for the rupee.
The currency was initially expected to open little changed around 90.70 per dollar. Instead, it began the session near 90.4550 and was last quoted at 90.46, up roughly 0.26% on the day.
One trader said a large state-run bank aggressively sold dollars, most likely acting on behalf of the RBI. Such indirect intervention via public-sector banks is a common operational method used by the central bank to manage currency volatility without making overt market appearances.
The timing, just before the local spot market opened, suggests authorities may have sought to influence early price discovery and stabilise sentiment before liquidity deepened.
The rupee has faced intermittent pressure amid global dollar strength and shifting expectations around U.S. interest rates. Emerging-market currencies broadly remain sensitive to U.S. data surprises and Federal Reserve policy signals.
India’s central bank has historically adopted a “lean against the wind” approach, aiming to smooth excessive volatility rather than target a specific exchange rate level. Traders will be watching whether follow-through selling emerges in coming sessions or whether the move was a tactical adjustment to prevent a disorderly open.
For now, the episode reinforces the RBI’s readiness to step in swiftly when market conditions warrant.
