The Reserve Bank of India (RBI) sold around $1.5 billion in the non-deliverable forwards (NDF) market on Friday, when the Iran-Israel flare up pressured the rupee, four sources, including one directly aware of the matter, said.

The central bank's hefty intervention in the NDF market took place before the local over-the-counter forex market opened, the sources said, when reports Israel had retaliated against Iran pushed the rupee and other emerging market currencies lower.

The RBI intervenes to prevent excessive volatility in the rupee. The central bank does not specify the quantum of its interventions.

NDFs are dollar-settled currency derivatives, an alternative way for investors to make bets on a currency.

The 1-month dollar/rupee NDF climbed to 83.80 on Friday amid reports of an escalation, but the RBI's intervention spurred a quick pullback of nearly 20 paise by the time the local spot market opened, traders said.

The intervention was "very aggressive", with "the intent clearly" to push USD/INR down before spot opened, a Singapore-based trader at a bank said, estimating the RBI sold $1.5 billion to $2 billion in NDF before open.

The RBI did not immediately respond to an email seeking comment.

A senior treasury official at a Mumbai-based private bank pegs the intervention at about $2 billion. "They sold near to $500 million around 83.70 itself (on the 1-month NDF)," he added.

As a result, the rupee opened at 83.5550 to the dollar in the spot market on Friday, down just 0.2% from its previous close. While the currency fell to an all-time low of 83.5750 later in the session, it ended the day higher at 83.47.

"The number (of $1.5 billion to $2 billion) is around the ballpark," a source directly aware of the RBI's actions said, when questioned on the size of the intervention in the NDF market.

On Friday, the central bank also sold dollars in the spot market, the sources said.

"After what the RBI did, I think the incremental appetite to take on and buy (the dollar/rupee) has further diminished," a spot trader at a Mumbai-based bank said.

The rupee was little changed at 83.3650 to the dollar on Tuesday. (Reporting by Nimesh Vora and Jaspreet Kalra; Editing by Mrigank Dhaniwala)