Published:October 13, 2026

RBI Intensifies FX Defense as USD/INR Eyes Sub-95, Says Societe Generale

Troy Bening
Written byTroy Bening

The Reserve Bank of India (RBI) has stepped up its defence of the Indian rupee, extending FX curbs to GIFT City and broadening the use of risk reserves, a move that Societe Generale's strategists say has supported a further INR rally with USD/INR looking to break below the 95 handle.

RBI actions and market signalling

Societe Generale highlights the twin measures — the expansion of FX curbs to include GIFT City and a wider application of risk reserves — as a more active stance by the RBI to limit rupee losses. These steps signal an intention to manage onshore flows and reduce avenues for outsized dollar demand, while using policy tools to influence liquidity and forward market dynamics. The bank’s measures are framed as targeted interventions rather than a broad monetary policy shift.

Why this matters for Forex traders

For currency market participants, the intensified RBI defence alters the balance of factors that influence USD/INR and emerging market FX more broadly. Markets may focus on how intervention activity affects the forward curve, onshore/offshore rate differentials and demand for dollars via trade and capital flows. The move also has potential implications for EM risk sentiment, which in turn may influence demand for the US dollar as reflected in the DXY index. Traders will watch whether intervention dampens volatility in USD/INR and whether similar defensive measures by other EM central banks follow.

While Societe Generale points to a prospect of USD/INR slipping below the 95 mark, market participants should note that the broader reaction will depend on ongoing RBI actions, global dollar dynamics, and incoming macro data.

Markets will be watching incoming indicators of RBI intervention intensity, changes in FX reserve usage, GIFT City inflows, and key global data that drive US dollar demand. Developments in the DXY and any shifts in bond yields or forward market pricing may provide further signals about how durable the rupee’s move will be.