RBI's $106.7bn short dollar position as rupee approaches 9th loss
The RBI has been working hard to keep the rupee steady, building up a $106.7 billion short dollar position over two years.
But after a brief bounce in June, the rupee is slipping again this July, marking what could be its ninth year in a row of losing value.
Even with efforts like making it easier for foreigners to invest in Indian bonds, rising oil prices and global shocks are still dragging the currency down.
Analysts forecast rupee 98 per USD
The RBI has started unwinding some of its dollar positions (about $10 billion to $15 billion since mid-June), but moving too fast could shake up markets, while going slow means higher costs.
With $20 billion in short-term contracts just rolling off and more US rate hikes expected, analysts think the rupee could fall further to 98 per US dollar by December.
Still, RBI Governor Sanjay Malhotra says that the RBI has adequate reserves and sufficient buffers, and would take necessary steps to ensure healthy capital flows and maintain "orderly movement" in the rupee, aiming for stability even as challenges continue.