The Reserve Bank of India (RBI) is likely to spend at least $20 billion more to support the rupee and increase the forex kitty through the reminder of the financial year, taking its overall forex intervention to $93 billion, according to a report.
The report by the Wall Street brokerage Bank of America Securities also expects the central bank to raise banks’ HTM (held-to-maturity) limits of excess government securities by 2 per cent of their books to fund the fiscal deficit if high forex intervention limits its open market operations (OMOs).
So far this fiscal, the central bank’s forex intervention has touched USD 73.7 billion, according to the assessment by Bank of America Securities India economists Indranil Sen Gupta and Aastha Gudwani.