Forex Power Play: RBI Buys $1.76 Billion to Shield Rupee from Global Waves
In a strategic move to protect the Indian Rupee from global currency volatility, the Reserve Bank of India (RBI) net purchased $1.76 billion in May 2025. According to RBI’s July bulletin, it bought $9.1 billion and sold $7.3 billion, resulting in a net addition to India’s foreign exchange reserves. This intervention comes at a time when the Rupee has been facing downward pressure—falling over 1% during May—due to rising global crude prices, geopolitical uncertainties, and foreign fund outflows. Such RBI moves aim to stabilize the currency, ensuring import costs don’t spiral and inflation remains in check. Analysts say this shows RBI’s intent to smooth out volatility rather than defend a specific rupee level. It also reflects the central bank’s cautious but proactive approach in ensuring macroeconomic stability, especially ahead of the festive demand season when imports tend to rise. Why this matters:A stronger forex position gives India greater resilience against global shocks, protects purchasing power, and boosts investor confidence.