RBI intervenes to defend rupee

The State Bank of India has been actively intervening in the foreign exchange market to support the India — Indian rupee amid elevated crude oil prices and uncertainty over the Middle East conflict. State-run banks, acting on behalf of the RBI, have consistently offered dollars whenever the rupee came under pressure, anchoring the currency within a narrow range. The rupee has held above the psychologically important 95.50 level, with 14-day realized volatility collapsing to around 2% from over 4% at the start of August. The RBI's interventions have been supported by robust dollar inflows from measures to bolster India's balance of payments, which have attracted nearly $57 billion and helped push foreign exchange reserves above $700 billion for the first time since April. Traders and bankers note the current market setup resembles the tightly managed rupee era under former RBI Governor Shaktikanta Das. The central bank has not commented on its intervention strategy.