India’s Rupee Strengthens as RBI Announces $9 Billion Bond Purchase

The Reserve Bank of India’s confirmation of a 750 billion rupee ($8.88 billion) government bond purchase this week has injected momentum into the currency market. The rupee breached the 84-per-dollar threshold, though importer hedging and suspected RBI dollar-buying capped further gains.

Market participants suggest the USD/INR pair has found a near-term floor, with traders anticipating range-bound movement between 83.80 and 85. The central bank appears committed to rebuilding reserves, which reached $688 billion on April 25—their highest level in six months following eight consecutive weeks of accumulation.

Bond markets responded favorably to the RBI’s intervention, with the 10-year yield closing at 6.3538% on Friday, down one basis point. The aggressive bond-buying program demonstrates the central bank’s dual focus on currency stability and yield management amid evolving macroeconomic conditions.