Indian Rupee: Intervention concerns shape outlook – Societe Generale

Societe Generale strategists note USD/INR remains below 95 in Asia after a 1.9% rally last week, supported by Reserve Bank of India (RBI) measures for Oil importers and speculation curbs. They highlight reported US Dollar (USD) selling by state-run banks and warns RBI’s direct supply to Oil companies could be constrained. FX reserves have dropped sharply and Indian Rupee (INR) shorts in the Reuters poll are at multi‑month highs.

RBI tools, reserves and positioning

"The INR stays below 95 in Asia, after rallying nearly 1.9% last week thanks to the RBI measures (window for oil importers and curbs on speculation)."

"State-run banks were reportedly selling small amounts of dollar to nudge the pair below 95.0."

"Traders believe the RBI may turn more conscious of intervention size going forward as direct supply to oil companies could exhaust about $400m per day."

"FX reserves have come down by around $60bn in the last five weeks from the peak of $785.7bn."

"In the latest Asia bi-weekly Reuters FX poll, INR short positions rose to the highest level since early June."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)