RBI's days of heavy currency intervention may have started

After remaining stable for a considerable period, the rupee has started sliding rapidly against the dollar

The Reserve Bank of India (RBI) has started intervening in the currency market, a move, many players say, would be a one-way street because the rupee is expected to remain volatile and weaken further. 

The RBI’s official stand is that it doesn’t target a level for the rupee but irons out volatility.

The volatility in the currency market increased recently. 

“Earlier, a 20-30 paisa movement in the exchange rate was considered extreme, but now it seems even a 50-paise movement daily is normal,” said a senior currency dealer with a foreign bank. 

After falling to 66.90 a dollar on Wednesday, the rupee started recovering