India's RBI said to have sold at least US$5 billion to boost rupee
The Reserve Bank of India sold at least $5 billion worth of the US currency, one of the people said, asking not to be identified as the information is private. The RBI didn't immediately respond to an email requesting comment on the matter. 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 Aug 6 to 50 per cent as a penalty for its purchases of Russian oil. A weaker rupee could fuel imported inflation and strain an already fragile economic recovery.
The intervention suggests a potential shift away from the RBI's previously restrained approach under Governor Sanjay Malhotra, who took office in December.
The rupee has depreciated more than 2 per cent so far this year, making it among Asia's worst-performing currencies. Roughly half of that drop came in the past two weeks after it became evident Trump was planning to increase the tariffs.
On multiple occasions last week, the central bank was seen stepping into the offshore market just before domestic currency trading began at 9 am Mumbai time, according to two of the people familiar with the matter, who declined to be identified as they aren't authorised to speak on it.
Relying on so-called non-deliverable forwards allows the central bank to guide the rupee's trajectory without having to sell large volumes of dollars outright. The central bank heavily relied on this strategy last year.
The RBI's latest foreign-exchange reserves data also point to increased intervention, with the stockpile falling by US$9.3 billion, the steepest drop since November, to US$689 billion in the week through Aug 1. Part of the decline may reflect valuation changes in global currencies, not solely the central bank's dollar sales or purchases. BLOOMBERG
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
8 minutes ago
- Straits Times
Russia and Belarus to hold joint military exercises in September, Minsk says
Sign up now: Get ST's newsletters delivered to your inbox MOSCOW - The Russian and Belarusian armies are set to hold joint strategic exercises in Belarus from September 12-16, the Belarusian Defence Ministry said on Tuesday. The aim of the drills is to test the capabilities of Russia and Belarus and "ensure the military security of the Union State and their readiness to repel possible aggression," the ministry cited Major General Valery Revenko as saying. The Union State is a borderless union and alliance between the two former Soviet republics and neighbours. Ukrainian President Volodymyr Zelenskiy warned earlier this year, without giving details or citing evidence, that Russia was "preparing something" in Belarus this summer under the guise of routine military exercises. In an interview with Time Magazine last week, Belarusian President Alexander Lukashenko said he had decided to move the location of the joint military drills away from Belarus' western borders with European Union countries, citing security concerns raised in Poland and the Baltic nations. Lukashenko called the idea that Belarus would utilise the drills to attack the three Baltic countries and Poland "complete nonsense." Revenko, the Major General, said the Belarusian-Russian drills were "being used as a pretext for ongoing militarisation" in neighbouring NATO countries, citing upcoming joint NATO drills in Poland involving at least 34,000 troops. Top stories Swipe. Select. Stay informed. Singapore Full service on NEL MRT line resumes after 3-hour disruption due to power fault Singapore Live: NEL services resume fully; Sengkang-Punggol LRT services still unavailable Singapore Plan to base Singapore's F-15 fighter jets in Guam cancelled Business Singapore raises 2025 economic growth forecast but warns of uncertainty from US tariffs Singapore Off-duty SCDF officer dies after accident in Punggol; 15-year-old pillion rider taken to hospital Business Goh Cheng Liang, Nippon Paint billionaire and richest Singaporean, dies aged 98 Business StarHub buys rest of MyRepublic's broadband business in $105m deal; comes after Simba buys M1 Singapore Circle Line to close early most Fridays and Saturdays, start late most weekends from Sept 5-Dec 28 Belarus, Russia's closest ally, has seen its relations with western neighbours and Ukraine deteriorate over the last few years after Moscow used Belarusian territory as a staging ground for an assault on Kyiv it launched in February 2022. REUTERS
Business Times
8 minutes ago
- Business Times
Japan's Nikkei races to record high, SoftBank leads tech surge
[TOKYO] Japan's Nikkei share gauge powered to an all-time high on Tuesday (Aug 12), driven by sharp gains for tech companies and renewed optimism over trade with the United States. With financial markets reopening after a holiday in Japan on Monday, the stock benchmark caught up with peaks scaled earlier this year by other major global centres. The Nikkei 225 surged 2.2 per cent to 42,718.172 at the bell, the highest close ever. It touched 42,999.71 earlier in the session, exceeding the previous intraday high of 42,426.77 set on July 11, 2024. In a roller-coaster ride in 2024, the Nikkei exceeded a record that had stood since 1989 during Japan's bubble economy. Tokyo's broader Topix gauge has been setting successive record highs since July 24 and also scored a new all-time high on Tuesday, rising 1.4 per cent to close at 3,066.37. The US Standard & Poor's 500 and MSCI's broadest gauge of global equities have been charting new peaks since June. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'The Nikkei was not able to hit a record until today because chip-related shares and auto shares dragged on the index,' said Takamasa Ikeda, senior portfolio manager at GCI Asset Management. 'The Nikkei could soon peak as technology shares that led Wall Street's rally have slowed down.' SoftBank Group soared 6.9 per cent to 14,825 yen, a historic high. The stock has catapulted more than 25 per cent in the past five days and got an added boost after Reuters reported that SoftBank was selecting banks for a US listing of its payments app operator PayPay. Semiconductor industry heavyweights Advantest and Lasertec jumped 6.3 per cent and 7.1 per cent, respectively. Global stock markets tumbled after US President Donald Trump's April 2 'Liberation Day' announcement of sweeping tariffs on imports from dozens of countries into the US. Shares have since more than recouped those losses as trade concerns abated and excitement over artificial intelligence (AI) companies soared. Uncertainty over tariff levels imposed by the US has weighed on shares in Japan, where exports are a key driver for the economy. The US on Thursday promised to amend a presidential executive order to remove overlapping tariffs on Japanese goods. 'The impact of US tariffs seems not as serious as the market had expected,' said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities. 'There will be more companies which will revise up their outlooks due to the limited impact of the US tariffs. The yen remains weak, which is also positive for Japanese companies.' Foreign money has been flooding into the Japanese market of late, but data from the Tokyo Stock Exchange last week indicated those flows may have peaked. Overseas investors turned net sellers of Japanese stocks and futures for the first time in 16 weeks in the period ending Aug 1. They sold a net 342 billion yen (S$2.9 billion) of shares and futures, a sharp reversal from net purchases of 1.26 trillion yen in the previous week. REUTERS
Straits Times
38 minutes ago
- Straits Times
Ukraine must be able to ‘choose its destiny': EU
Sign up now: Get ST's newsletters delivered to your inbox The leaders of the European Union welcomed the efforts of President Trump towards ending Russia's war of aggression against Ukraine. BRUSSELS - EU leaders stressed on Aug 12 'the inherent right of Ukraine to choose its own destiny', just three days before US President Donald Trump was due to meet his Russian counterpart Vladimir Putin . 'We, the Leaders of the European Union, welcome the efforts of President Trump towards ending Russia's war of aggression against Ukraine and achieving a just and lasting peace and security for Ukraine,' a statement said. 'A just and lasting peace that brings stability and security must respect international law, including the principles of independence, sovereignty, territorial integrity and that international borders must not be changed by force.' Ukrainian President Volodymyr Zelensky and European leaders are scheduled to meet with Mr Trump on Aug 13. Mr Trump has been vague about his expectations for the Alaska summit with Putin on Friday, describing it as a 'feel-out meeting' to gauge the Russian leader's ideas for ending the war in Ukraine. Mr Zelensky has ruled out ceding territory seized by force. Mr Trump – who publicly berated Mr Zelensky at a White House meeting in February – said he was a 'little bothered' by Mr Zelensky's stance and insisted land swaps would need to take place. 'There'll be some swapping, there'll be some changes in land,' he said. Top stories Swipe. Select. Stay informed. Singapore Full service on NEL MRT line resumes after 3-hour disruption due to power fault Singapore Live: NEL services resume fully Singapore Plan to base Singapore's F-15 fighter jets in Guam cancelled Business Singapore raises 2025 economic growth forecast but warns of uncertainty from US tariffs Singapore Off-duty SCDF officer dies after accident in Punggol; 15-year-old pillion rider taken to hospital Business Goh Cheng Liang, Nippon Paint billionaire and richest Singaporean, dies aged 98 Business StarHub buys rest of MyRepublic's broadband business in $105m deal; comes after Simba buys M1 Singapore Circle Line to close early most Fridays and Saturdays, start late most weekends from Sept 5-Dec 28 But Mr Trump said he would also tell Mr Putin that 'you've got to end this war'. AFP
