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RBI says its forward short dollars are still manageable for the rupee
BNY Mellon cites RBI Governor Sanjay Malhotra saying intervention benefits are fading as sterilization costs rise.
BNY Mellon strategist Geoff Yu points to remarks from Reserve Bank of India Governor Sanjay Malhotra suggesting the RBI’s net-short position in forward US dollars remains manageable, even as the central bank has taken larger bearish bets aimed at supporting the rupee.
Malhotra said the RBI is pursuing a market-determined exchange rate and calibrating any data-driven intervention, while citing stronger-than-expected inflows and noting that the additional value from swapped dollars is diminishing as sterilization costs increase, according to FXStreet.
The commentary is framed around how the RBI balances forward positioning with the cash market, with Yu highlighting that despite the size of the forward bets, the central bank considers the overall exposure contained.
The piece also notes broader market context around the US dollar and yields, including a move by the US Treasury to expand some long-dated debt buybacks, which had pressured yields and influenced currency trading earlier in the week.