For the third time in a year, India has been accused of selling off the US dollar to prevent the rupee from falling.
The US dollar hit the Indian rupee this week, pushing it to an all-time low of 83.61. However, the rupee managed to reverse course after briefly gaining against the US dollar to reach 83.50.
Insiders suggest that the rupee’s surge is not natural and certain “players” may have been involved in it to prevent it from falling. It is possible that the Reserve Bank of India (RBI) was one of those “players” who helped keep the rupee from collapsing against the US dollar.
BRICS members – India, China and Russia in particular – have been accused of meddling in currency markets before.
The BRICS countries intervened in the foreign exchange market by selling US dollars to support their local currencies. The Reserve Bank of India is likely to be selling off US dollars in the foreign exchange market to stem the fall in the rupee.
An anonymous forex analyst who spoke to Reuters said the RBI may have intervened to support the rupee against the US dollar.
The Indian rupee has faced stiff competition from the appreciating US dollar, sending the local currency to new lows. This decline in local currencies comes as BRICS seeks to end its dependence on the US dollar.
Despite threats of de-dollarization by the BRICS countries, the US dollar remains strong against all local currencies. The Indian rupee, the Chinese yuan and the Japanese yen are struggling to weaken the US dollar in the foreign exchange market.
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