RBI May Buy Dollars For Reserves Should Rupee Gain, Citi Says

The Reserve Bank of India (RBI) is considering purchasing US dollars to bolster its foreign exchange reserves, particularly if the Indian rupee appreciates significantly. This potential move follows a substantial intervention by the RBI in 2025, during which it sold approximately $49.5 billion to stabilize the rupee, which had fallen to unprecedented lows. Analysts, including those from Citi, suggest that the RBI's strategy aims to maintain a healthy level of reserves while managing currency fluctuations. The rupee's performance has been volatile, and the RBI's actions are seen as crucial for ensuring economic stability. By potentially buying dollars, the RBI would not only enhance its reserves but also prepare for any future market disruptions. This proactive stance reflects the bank's commitment to safeguarding the currency and maintaining investor confidence amid global economic uncertainties.