RBI’s defence of rupee turns aggressive

CENTRAL BANK ACTION CURBS CURRENCY VOLATILITY AFTER OCTOBER SLIDE

- CHRISTINA TITUS

THE RESERVE BANK of India (RBI) has stepped up its defence of the rupee in recent weeks, curbing volatility and signalling it will not tolerate speculative pressure.

The central bank’s aggressive intervention marks a shift from its earlier stance, when it appeared comfortable allowing a gradual depreciation to support exporters after the US imposed punitive tariffs.

Market experts said mid-October was the turning point, when speculators were pushing the rupee towards %89 a dollar and the central bank decided to intervene decisively.Since then, the rupee has been moving within a narrow 11-paise daily average range in November, compared with 35 paise in April and 49 paise in May.