In a bid to shore up the Indian currency, the Reserve Bank of India (RBI) executed a significant forex intervention in September 2025, selling a net amount of $7.91 billion (approximately ₹ the equivalent) to stabilise the Indian rupee.
This comprised roughly $10.11 billion in sales and about $2.2 billion in purchases during the month.
Why the intervention was needed
- The rupee had been under pressure, falling to record lows around ₹ 88.80 per US dollar in September.
- External headwinds included strong dollar demand from importers (notably gold and silver), outflows by foreign portfolio investors, and trade-tension risks with the US.
- The intervention also involved forward and futures positions: the RBI’s net short position in dollar forwards/futures rose to about $59.4 billion by end-September.
Key implications of the RBI forex intervention
- Currency stabilization: By selling foreign currency, the RBI aimed to reduce downward pressure on the rupee and deter further speculative weakening.
- Reserve management: Despite large sales, India’s overall foreign exchange reserves remained strong—about $700.2 billion as of late September—indicating buffer capacity.
- Market signal: The move sends a message that the RBI is prepared to actively intervene in both spot and forward markets, which may improve confidence among investors.
- Cost & sustainability: Continued heavy interventions may raise questions about the cost, the drain on reserves, and whether structural issues (trade deficit, capital outflows) are being addressed.
What to watch next
- Will the rupee stabilize or resume its slide? The intervention may buy time, but underlying pressures remain.
- How will the RBI adjust forward book exposure and other tools of intervention? Analysts expect further adjustment. Reuters
- What structural reforms can reduce the need for repeated large interventions—e.g., narrowing the trade deficit, boosting exports, managing capital flows.
- How will reserves evolve if interventions continue? Monitoring reserve adequacy is key for external stability.
Final thoughts
The RBI’s forex intervention in September—with a net sale of about $7.9 billion—highlights the intensity of the pressure on India’s currency and the central bank’s readiness to act. While the measure is a show of strength and stabilisation, the sustainability of such interventions hinges on improving underlying external balances and reducing dependence on reactive support.
