India's central bank has pushed its net short dollar position to a record $103 billion in March, marking a sharp increase from February levels. The Reserve Bank of India's aggressive intervention in derivatives markets reflects intensified efforts to defend the rupee against mounting pressure from rising crude prices following the US-Iran conflict.

The $25.4 billion surge in short positions was split between near-term and longer-term buckets, with $103 billion in total short exposure. RBI data shows $51.4 billion in positions up to one year and $52.8 billion in longer-dated contracts, partially offset by a modest $1.1 billion long position in the shortest tenor.

The rupee's decline prompted the RBI to tighten banks' open position limits to $100 million and temporarily restrict offshore rupee contracts. Despite these measures, the currency hit a fresh low of 95.3337 per dollar as energy costs threaten to widen India's current account deficit amid limited capital inflows.

Investors now face heightened currency risk as the central bank burns through reserves to maintain stability. The record intervention signals deepening concern over external pressures that could reshape India's monetary policy trajectory through the remainder of 2024.