Rupee at Risk: Could Hit 95/- as RBI’s $80 Billion Intervention Faces Scrutiny

Mumbai, February 28, 2025 – A shocking exposé circulating online claims the Indian rupee could plummet to 95/- against the U.S. dollar, alleging that the Reserve Bank of India (RBI) has masked the currency’s “true” value—purportedly 1 USD = 108 Rs—through aggressive intervention. Sources suggest the RBI has burned through $80 billion of its foreign exchange reserves to keep the rupee artificially afloat below the 100/- mark. As of today, the official exchange rate hovers around 87 Rs per dollar, but this narrative challenges the central bank’s strategy, hinting at a seismic shift in its approach that could unleash market chaos.

Verification reveals a complex reality. Official RBI data confirms a steep decline in forex reserves—dropping from a peak of $704.89 billion in September 2024 to $623.98 billion by January 17, 2025, a loss of approximately $77 billion, per Moneycontrol reports. This aligns closely with the $80 billion figure cited, suggesting significant dollar sales to curb rupee depreciation. The rupee has weakened from 83.70 in September to 87.96 by February 10, per Bloomberg, amid pressures like a surging dollar, foreign outflows, and trade deficits. Posts on X echo this sentiment, with users claiming, “If RBI hadn’t propped it up, it’d be 108 to 1 USD,” though no concrete evidence supports this exact figure.

Analysts offer mixed perspectives. The RBI’s interventions—estimated at $10-11 billion in early February alone, per Reuters—have historically kept the rupee among Asia’s least volatile currencies. Yet, its Real Effective Exchange Rate (REER) hit 108.14 in November 2024, indicating overvaluation, which corrected to 107.20 by December, per RBI bulletins. Some economists argue that letting the rupee weaken to 95/- could restore export competitiveness, especially if Asian peers like the yuan continue to slide. “The RBI may ease its grip to balance liquidity and growth,” said Gaura Sen Gupta of IDFC FIRST Bank. Conversely, others warn that a sudden drop to 95/-—or the alleged 108/-—could spike inflation via costlier imports, a concern raised by Madan Sabnavis of Bank of Baroda.

The claim of a “true” 108 Rs rate lacks substantiation beyond speculative chatter. Market forces, not RBI diktats, determine exchange rates under India’s managed float regime, as reiterated by Governor Sanjay Malhotra on February 8. Yet, the $77 billion reserve depletion since September—coupled with $195.57 billion in gross dollar sales between April and November 2024—underscores the RBI’s heavy hand. Posts on X suggest this “face-saving” tactic could falter, predicting a rupee crash if intervention wanes.

As of 9:53 AM IST today, the rupee trades at approximately 87.47/-, per live forex data, not 95/- or 108/-. The RBI’s next moves remain pivotal. Will it loosen its stranglehold, risking a free fall, or double down to defy market gravity? With $80 billion already spent, the rupee’s fate—and India’s economic stability—hangs in the balance, leaving citizens and investors bracing for what’s next.