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2025-10-16 15:53:09
[RBI's Unexpected Intervention Suppresses Rupee Shorts] According to reports, ten months after taking office, Reserve Bank of India (RBI) Governor Sanjay Malhotra sent a clear signal to forex traders: the rupee can fluctuate more freely, but speculators who attempt to capitalize on the opportunity will likely be crushed. On Wednesday, the rupee surged nearly 1% after the RBI intervened in both the offshore and onshore markets, forcing traders betting on its depreciation to urgently cover their short positions. The intervention virtually ended market talk of the rupee falling below its all-time low of 88.80. Traders said that with strong economic growth, low inflation, and $700 billion in foreign exchange reserves, the RBI has both the firepower and the resolve to confront what it calls "speculators." Kunal Sodhani, head of treasury trading at Shinhan Bank in Mumbai, said, "The RBI's signal seems to be: if we intervene, we'll do it ruthlessly." He predicts the rupee could rise to 87.40 in the coming days.
