RBI Forex Market Intervention Failed to Stabilize Indian Currency

In the last few days, RBI tried to stabilize Indian Currency through Forex Market intervention post 1.7% slide in one day. Intervention reflected in strong upswing in INR for a day. The slide started today also and it seems like RBI intervention happened again but it failed to control INR fall however it managed successfully to control free fall. One of the contributors for weak currency is the high import oil prices and OMC (Oil Marketing Companies) recoveries. One rupee fall against US $ increase OMC under recoveries by 9000Cr. Today, RBI Dy-Governor came live on CNBC TV18 to assure Industry that Currency situation is similar to 2011 and 2012 but unfortunately failed to highlight growth rate of previous years and on-going growth rate. The honourable FM statement and assurance regarding potential step to control Indian Currency fall against major currencies failed to lift sentiment. With widening balance of payment, fiscal deficit, it seems that RBI cannot be too flexible.

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