RBI sells $5 billion to boost rupee

THE RESERVE BANK of India (RBI) sold US dollars across both onshore and offshore currency markets this month to prop up the rupee following a prolonged weakness, according to sources.

- PRATIGYA VAJPAYEE & BHASKAR DUTTA

The RBI sold at least $5 billion worth of the US currency, one source said. If the trend persists, it could become RBI's largest month of net dollar sales since January.

The rupee fell to 87.89 per dollar last week, just shy of its all-time low, as US President Donald Trump doubled tariffs on Indian goods on August 6 to 50% as a penalty for its purchases of Russian oil. A weaker rupee could fuel imported inflation and strain an already fragile economic recovery.

The RBI intervention suggests a potential shift from the RBI's previously restrained approach under governor Sanjay Malhotra, who took office in December.