New Delhi. The Reserve Bank of India (RBI) has tried to stabilize the rupee by selling foreign currency worth about $26 billion since the end of September. The purpose of doing so is to stop the fall of the rupee so that it remains around the level of Rs 84 per dollar. However, the rupee fell below this level due to the strength of the dollar after Donald Trump won the presidential election in the US.

Whenever the rupee falls, RBI sells dollars, which reduces the supply of rupees and keeps its value stable. On the other hand, if the rupee starts rising rapidly, RBI buys dollars so that the rupee does not strengthen further. This process is based on demand and supply, in which RBI tries to stabilize the rupee by selling dollars in the market.

The fall did not stop.26.4 billion dollars
According to RBI data, the central bank sold about $26.4 billion dollars in October to stop the fall of the rupee. In September, the rupee reached a record low of Rs 83.97 per dollar, to improve which the RBI increased the foreign exchange reserves. After this, the rupee strengthened a bit and came down to Rs 83.49 per dollar. However, due to heavy selling by FIIs, the rupee started falling again and reached the level of Rs 84 by the end of October.

What did the IMF say?
The International Monetary Fund (IMF) gave India's exchange rate arrangement the status of 'stabilized arrangement' in December 2023, saying that the intervention in the currency market by the RBI has increased. The IMF believes that the RBI has prevented the fall of the rupee by intervening in the currency market. However, the RBI has expressed its disagreement with this decision of the IMF and said that these interventions were made to reduce volatility in the market. An RBI official said that the RBI's objective is not to control the value of the rupee at any particular level, but to reduce any kind of unexpected volatility. According to the IMF, this intervention indicates a change in India's foreign exchange policy from 'floating' to 'stabilized', which shows that India is intervening more in the currency rate.