India’s central bank, the Reserve Bank of India (RBI), is dealing with a roughly $100 billion challenge as it unwinds a large short-dollar position built during a period of persistent rupee weakness. Multiple reports say the RBI used extensive currency interventions over the past two years to defend the rupee, creating a sizable portfolio of commitments to sell dollars forward—effectively a “bearish” stance on the dollar/rupee relationship.
According to the accounts, the RBI is now shifting toward reducing that exposure without causing disruptions to the foreign-exchange market. One outlet reports that the RBI has begun trimming the short dollar forward position, describing it as a stock of forward commitments to sell the greenback at future dates.
The coverage also links the unwinding efforts to recent policy measures that are expected to attract foreign capital to India. The implication across sources is that foreign inflows can help support the rupee while the RBI reduces its forward commitments, lowering the risk of renewed volatility during the transition.
