India Accused of Dumping US Dollars To Keep Rupee From Falling

BRICS member India is accused for the third time in a year of dumping US dollars to keep the rupee from falling. The US dollar hammered the Indian rupee making it fall to an all-time low of 83.61 this week. However, the rupee managed to reverse course after briefly rising against the US dollar and reached 83.50.

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The spike in the rupee, insiders say, is not natural and might have involved ‘players’ to keep it from falling. The players in question might be the Reserve Bank of India (RBI), which helped keep the rupee from crashing against the US dollar. BRICS members India, China, and Russia have previously been called out for interfering in the currency markets.

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BRICS: India Might Have Dumped US Dollars To Stop the Rupee’s Fall

BRICS countries have been intervening in the foreign exchange market by selling US dollars to keep their local currencies afloat. The Reserve Bank of India might have likely dumped US dollars in the forex market to halt the rupee’s loss. A forex insider told Reuters on the condition of anonymity that the RBI likely interfered to save the rupee from the US dollar. “Like yesterday, they (state-run banks) are again on the offer consistently,” said a senior trader at a private sector bank.

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The Indian rupee is facing stiff competition from the rising US dollar making the local currency fall to new lows. The dip in local currencies comes at a time when BRICS is looking to end reliance on the US dollar. Read here to know how many sectors in the US will be affected if BRICS ditches the dollar for trade.

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Despite threats of de-dollarization from BRICS countries, the US dollar remains strong against all local currencies. The Indian rupee, Chinese yuan, and Japanese yen are failing to pin the US dollar down in the currency market.