State‑run banks pounded the market after the RBI signaled it would intervene, nudging the rupee from an opening of 96.71 to 96.65 in early trading.
The rally came against a backdrop of a 0.01% jump in the dollar index to 102.25 and Brent crude hovering at $102.37, as fears of supply disruptions in the Strait of Hormuz tightened global markets.
Meanwhile, India’s foreign‑exchange reserves fell by $50 billion in the last three weeks, dropping from a September peak of $786 billion, a move that has rattled investor sentiment.
Anil Kumar Bhansali, head of treasury at Finrex, said corporate importers’ demand for dollars coupled with safe‑haven flows overrode the RBI’s hawkish stance, forcing the currency to rise before intervention stemmed further losses.
The BSE Sensex slid 264.97 points and the NSE Nifty50 fell 87.50 points, while FIIs sold shares worth Rs 6,121.37 crore, underscoring a broader market pullback.
RBI Governor Shaktikanta Das has promised to act against speculation in the USD/INR pair, and market participants are braced for another intervention as the central bank seeks to anchor the rupee’s true value.