RBI Steps Up Rupee Defence as Currency Faces Fresh Pressures

India's central bank is ramping up efforts to stabilize the rupee as external pressures mount. Foreign deposit inflows have strengthened the RBI's capacity to intervene in currency markets, with near-term volatility dropping to a ten-month low.

However, rising crude oil prices and narrowing interest rate differentials between India and other economies continue to weigh on the currency. The RBI faces a challenging task balancing support for economic growth with currency defence, adjusting its intervention strategy to manage rupee volatility.