RBI’s defence of rupee vs dollar is weighing on India’s forex reserves

New Delhi (TIP): The Reserve Bank of India’s recent defence of the rupee vs dollar is weighing on the nation’s foreign exchange reserves, prompting calls from some analysts to scale back future intervention.
India’s forex reserves, excluding gold, are now just enough to cover for 8.7 months of imports, the lowest in three years, according to data compiled by Bloomberg. The rupee weakness comes at a time when India is facing a rising import bill due to higher crude oil prices, with implications for both its economy and markets.
The more the RBI intervenes, the lesser firepower it will be left with, which can lead to more problems if the ongoing crisis in the Middle East continues, said Indranil Pan, chief economist at Yes Bank Ltd. “On the external sector, the shock absorber has to be the exchange rate only. There is definitely a need for the RBI to be slightly more flexible in terms of allowing rupee depreciation.”
In recent weeks, the RBI has stepped up intervention in the currency market to shield the rupee, which fell to a fresh record low of 92.48/dollar on Wednesday (18 March 2026).
India’s forex reserves fell to $563 billion in the week of 6 March, from a peak of $591 billion in June. Overall reserves, which have been supported by higher gold prices, declined by the most since November 2024.
India needs a forex reserve buffer of at least $1 trillion for robust intervention capacity, according to former RBI Deputy Governor Michael Patra.
The RBI’s ammunition to support the rupee is lower after accounting for its outstanding dollar sales, with its forward book at $67.8 billion at the end of January.
“Defending a particular level of the rupee could become very problematic very quickly, if the fundamentals have shifted for good,” said Dhiraj Nim, FX strategist at Australia and New Zealand Banking Group. “The RBI can let the rupee adjust a bit more before the level of reserves becomes a concern.”
RBI says it found no material concerns at HDFC Bank after chairman’s exit : The Reserve Bank of India ?said on Thursday it found no ?material concerns regarding HDFC Bank’s conduct or governance after its part-time chairman resigned citing differences with the lender over “values and ethics”.
“The bank remains well-capitalised and the financial position of the bank remains satisfactory with sufficient liquidity,” the Reserve Bank of India said in a statement.
Shares of HDFC Bank fell as much as 8.7% on Thursday after Atanu Chakraborty’s resignation, while the lender said there were no material issues at the bank.
Bain Capital Gets RBI Nod for Manappuram Finance Control
Bain Capital has received the RBI approvals for joint management control of Manappuram Finance and its subsidiaries pursuant to the acquisition of a stake in the gold loan firm.
Following the proposed acquisition of up to 41.66 per cent stake of Manappuram Finance, its subsidiaries Asirvad Micro Finance Limited (AMFL) and Manappuram Home Finance Limited (MHFL) would come under the joint control of the US-based global private investment firm Bain Capital, Manappuram Finance said in a statement on Wednesday.
With this, Manappuram Finance and its subsidiaries are now in receipt of all requisite statutory approvals for Bain Capital’s proposed investment of approximately Rs 4,385 crore and joint control with the existing promoters, together with the consequent open offer under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, it added.