Bankers: Iran conflict impacting markets, India's central bank intervenes with $12 billion to defend rupee.

According to seven bank officials, the Reserve Bank of India launched a strong defense of the rupee this week, using around $12 billion to contain the impact of escalating Middle East conflicts. This conflict has severely affected the market, pushing the Asian currency to a historic low. The $12 billion figure is the median estimate provided by bank officials to Reuters, with estimates ranging from $9 billion to over $15 billion. This intervention highlights the serious challenge faced by the Reserve Bank of India in the face of exchange rate fluctuations caused by the ongoing seventh day of the Middle East conflict. The conflict has spread to the Gulf region, causing oil prices to rise by approximately 16% this week, leading to $2 billion in foreign outflows from the Indian stock market and prompting importers to increase hedging operations for short-term payment obligations. The backdrop for this massive intervention by the Reserve Bank of India is that India's foreign exchange reserves exceed $723 billion, ranking among the top in the world.