The U.S. dollar is rallying against the Indian Rupee after reaching a high of INR 83.24 last week. Indian authorities are worried that the USD’s growth against the INR could hamper the import and export sectors in the subcontinent.
In a surprising move, the Rupee rallied from 83.12 to 83.00 on Sept. 8 within a minute. This raised doubts that India might have a matching system in place. The foreign exchange markets rarely move this much in minutes, raising doubts about BRICS member India trying to limit the U.S. dollar’s growth.
A trader told Reuters on the condition of anonymity that a large Indian state-run bank aggressively sold U.S. dollars in the international markets. The insider quipped that the sell-off might have been initiated on behalf of the Reserve Bank of India (Central Bank).
The insider said that India does not want the U.S. dollar to close at a record high and, therefore, aggressively sold USD. “The RBI seems determined to keep INR away from a record low, but given global conditions, the pressure may persist,” Reuters quoted the trader.