RBI Creates Intervention Space as Rupee Faces Renewed Strain

The Reserve Bank of India has carved out more flexibility to defend the rupee, as rising geopolitical tensions and a spike in energy prices pushed the currency to a record low on Wednesday.

The central bank has changed the maturity profile of its short dollar forwards, reducing near-term delivery obligations and pushing them further out, the latest RBI data show. By reducing the amount of dollars it must deliver over the next year, the central bank has more room to take on fresh short dollar positions and intervene if pressure on the rupee persists.