Traders note that RBI is likely selling dollars through state-run banks to support the rupee

Intervention routed through state-run banks is the RBI's long-standing preferred channel for smoothing rupee moves, a pattern repeated across past episodes of emerging market FX pressure; the use of public sector banks as agents rather than disclosed outright sales is itself the tell, since it keeps the operation off the tape while the price action reveals it. The distinction that matters is between smoothing and defence: episodic selling into intraday weakness to slow depreciation has historically been routine and well tolerated, whereas sustained sales at a defended level have tended to show up later in falling forward book and reserve data, which is where the scale of any operation eventually becomes visible. The rupee's sensitivity to the dollar index, crude, and portfolio flows frames the conditions under which such intervention has recurred, typically when depreciation risks becoming disorderly rather than when a level is being protected. What tends to follow is watching the onshore forward premia and spot fixings for persistence, the weekly reserve figures for drawdown, and whether the central bank pairs spot sales with forward book adjustment, which past episodes have shown changes the carry cost of defending. The RBI's track record is one of leaning against volatility rather than targeting a rate, and precedent suggests the operation caps the pace of the move more durably than it caps the level.