India Central Bank intervenes to stop the bets of speculative rupees

(Bloomberg) -The Bank of the Reserve of India intervened in the currency market this week to stop the speculation in the rupee, according to a person familiar with the thought of the central bank, surprising the merchants who expected a more approach in the currency of The New Governor.

Most of Bloomberg

After reaching a series of minimum records in recent weeks, the rupee won almost 1% against the dollar on Tuesday, its largest rally in more than two years and most among Asian companions. While the RBI did not reveal the magnitude of its intervention, Anil Kumar Bhansali, Treasury Chief of the Finrex Treasury Advisors, estimated that it could have been up to $ 11 billion for two days, which said that the previously seen levels of authority.

The RBI decided to intervene on Monday and Tuesday after detecting an unusual accumulation of speculative positions, which exert additional pressure on the local currency, said the person, asking not to be identified discussing internal issues. The Central Bank will not hesitate to intervene significantly and suddenly to avoid an accumulation in speculative bets, said the person.

The regulator had been closely monitoring the open positions in the currency markets since the rupee had been pressed in recent weeks, the person said. The position of the central bank in the rupee remains unchanged, since it is not aimed at a specific level for the currency, but will intervene to soften volatility, said the person.

The RBI did not immediately respond to an email in search of comments.

The new governor Sanjay Malhotra, who assumed the position in December, had pointed out to the officials his willingness to let the currency depreciate in line with his Asian companions to help correct part of his overvaluation, Bloomberg News previously reported. The rupe has weakened more than 2% against the dollar since its appointment.

At a press conference after the decision of the interest rate of last week, Malhotra said that the Central Bank wants “order and stability” in the currency and does not see the need to intervene daily.

Bhansali of Finrex said that the RBI could have sold currencies worth $ 7 billion on Monday and $ 4 billion on Tuesday, according to the estimates provided by the interbank corridors.

-With assistance from Sircar Subhadip.

Most read Bloomberg Businessweek

The story continues