RBI unwinds $106.7 billion short dollar position to stabilize rupee
The Reserve Bank of India (RBI) is carefully unwinding its record $106.7 billion short-dollar position from May, a strategy meant to help the rupee stay afloat without burning through India's foreign exchange reserves.
But this process is a balancing act: buying back dollars with rupees could put fresh pressure on the currency, so the RBI is taking it slow to avoid sudden shocks.
RBI eases access, cuts $10-15 billion
To attract more global money, the RBI has made it easier for foreigners to invest in Indian government bonds and trimmed taxes on debt returns.
Since mid-June 2026, it has already cut $10 billion to $15 billion from its offshore positions.
Still, global factors like rising oil prices, thanks in part to U.S.-Iran tensions, are making things tricky, and despite these efforts, the rupee has slipped again in July after a brief gain last month.