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RBI Faces $100 Billion Challenge After Record Currency Defense

Currency & FXMonetary PolicyInterest Rates & Yields

India’s central bank has accumulated one of the world’s largest bearish USD positions to support a persistently weak rupee, and the key near-term challenge is unwinding that hedge without destabilizing FX markets. The news highlights the risk that a disorderly unwind could pressure the rupee, making the next policy steps and liquidity management critical.

Analysis

India’s central bank has accumulated one of the world’s largest bearish USD positions to support a persistently weak rupee, and the key near-term challenge is unwinding that hedge without destabilizing FX markets. The news highlights the risk that a disorderly unwind could pressure the rupee, making the next policy steps and liquidity management critical.

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