Part 4/9:
As the Indian rupee continues its downward trajectory, plunging to alarming lows of 87.79 against the dollar, the RBI has been forced into substantial currency market interventions. With its currency weakening significantly since late last year, the central bank's aggressive actions are aimed at stabilizing the rupee yet come with negative repercussions such as tightening interbank liquidity.
The RBI's strategy involved hefty interventions on multiple fronts—between Monday and Tuesday alone, estimates suggest around $11 to $15 billion was funneled into reversing the rupee's decline. Despite these aggressive maneuvers, the interventions have not provided the desired stability, indicating that simply injecting capital may not address the core issues affecting India's economy.