RBI is likely selling US dollars to limit the rupees losses, according to traders

The RBI has a long-standing pattern of smoothing rupee moves rather than defending any level, typically leaning against rapid depreciation through spot dollar sales with forward book operations used to manage the liquidity drain, since unsterilized spot intervention tightens rupee liquidity at the short end. Past episodes of reported RBI selling have tended to cap intraday moves without reversing the underlying trend when the pressure is driven by broad dollar strength or portfolio outflows, so the tell is whether the pair stabilizes on lower volumes or simply resets lower once the central bank steps back. The distinction worth drawing is between intervention against speculative overshoot, which has historically stuck, and intervention against fundamental flow, which has historically only slowed the move. Follow-ons are the forward premium and onshore-offshore spread, which reveal the scale and persistence of the operation, plus any shift in the RBI's tolerance signaled at its next policy communication. As trader-sourced reporting rather than official confirmation, the sizing and intent remain unverified.