RBI Responds to Dollar Glut, NDF Pressure on Rupee Forwards

Indian bankers urged the RBI to act against a dollar glut and NDF pressure impacting rupee forwards. The RBI responded by announcing a $32 billion liquidity injection and currency swaps to stabilize the rupee and ease hedging costs.

• Bankers urged RBI intervention to counter dollar glut and NDF pressure.
• Rupee forward premiums surged to multi-year highs, raising hedging costs.
• RBI announced $32 billion liquidity injection via bond purchases and swaps.
• Measures aim to absorb excess dollars and infuse rupee liquidity.
• Rupee has depreciated approximately 6.5% against the dollar in 2025.
• NDF market and corporate dollar demand contribute to rupee volatility.

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