India's dollar sale shocks: Rupee recovery thanks to billion-dollar intervention!

India's dollar sale shocks: Rupee recovery thanks to billion-dollar intervention!

India and the dollar cracker! Once again, the world's largest democracy is making headlines after being accused of dumping billions of dollars on foreign exchange markets to protect its native currency, the rupee (INR). The falling rupee hit a dizzying all-time low of 87.60 against the US dollar on Monday, sending markets into turmoil. The Reserve Bank of India stepped in and ordered state-owned banks to sell US dollars to support the rupee, reports watcher.guru.

This dramatic intervention sent financial markets into disarray as the rupee soared to 86.90 on Wednesday. Wow! A trader at a private bank told Reuters that the sudden surge has caused a "bloodbath for longs (on USD/INR)." And this is not the first time that India has pulled off such maneuvers. Last year the country had to face several allegations of unfair market interventions. But uncertainty remains and experts at Kotak Mahindra Bank say pressure on INR could continue due to global uncertainties. The real motives behind Indian foreign exchange operations are can be read in the watcher.guru article.