‘RBI ready to spend $100 billion more from forex reserves to defend rupee

• RBI is prepared to sell a sixth of its foreign exchange reserves to defend rupee against a rapid depreciation after it plumbed record lows in recent weeks.

Recent developments

• Rupee has lost more than 7% of its value in 2022 and weakened past 80 per U.S. dollar.
• Fall would have been far bigger if RBI had not stepped in.
• RBI’s currency reserves have slid more than $60 billion from its peak of $642.45 billion, due to its dollar selling intervention.
• Despite the drawdown, RBI's reserves remain the fifth largest in the world, giving central bank confidence in its ability to prevent any sharp depreciation of the currency.

Prelims take away

• Foreign exchange reserves