RBI sells $5 billion to curb rupee volatility amid Trump tariff threats: Report

The Reserve Bank of India is said to have sold $5 billion in the currency market to prop up  the rupee, which saw a three-month record low against the US dollar this month, falling below 87, reported Bloomberg, citing inside sources. 

Trump’s tariffs have affected the Indian Rupee the worst, which fell to 87.89 last week, as the US president threatened 50% tariffs on Indian goods for purchasing oil from Russia.

On Monday, the rupee stood at 87.70 with down by 0.25% for the day

As per Bloomberg, $5 billion is the highest amount sold by India’s central bank since January this year.

This report marks the second hit to India’s forex reserve, as the strategy of reportedly selling US dollars to settle the volatility comes after India withdrew $5 billion from its forex reserves last month, according to the bank’s July 2025 bulletin.

In Q4 2024-25, the country posted a current account surplus of $13.5 billion (1.3% of GDP), helped by stronger net services exports and higher remittances. For the full fiscal year, the current account deficit narrowed to $23.3 billion (0.6% of GDP) from $26 billion the year before.

However, net capital inflows — including foreign direct and portfolio investments — were insufficient to fully finance the gap. As a result, the RBI had to draw down $5 billion from its foreign exchange reserves on a BoP (Balance of Payment) basis.