India deploys up to $80 billion to defend rupee as reserves face pressure
INDA•India has deployed an estimated $75 billion to $80 billion defending the rupee since special foreign-currency inflow measures began June 8. Reserves fell to $734.6 billion as of October 2, about $51 billion below their early-September peak.
1. Reserves under pressure
India has deployed an estimated $75 billion to $80 billion defending the rupee since special foreign-currency inflow measures began June 8. Foreign-exchange reserves fell to $734.6 billion as of October 2, while net forward dollar liabilities stood at about $200 billion at September-end. The RBI introduced direct dollar access for oil companies and cash-margin requirements on certain forward dollar purchases to curb open-market demand. Repeated interventions near 97 rupees per dollar suggest an implicit tolerance threshold; Ambit warned continued reserve depletion could fuel depreciation speculation.
