RBI does not target any band for rupee, allows it to find its own level: Guv Malhotra
The governor’s statement comes at a time when the rupee has crossed the 90 mark against the US dollar and is hovering near that level.
“We are not targeting any price level or range. We let markets determine prices. We believe markets are very efficient, especially in the long run. This is a very deep market,” he said while responding to a question on rupee depreciation at the post-monetary policy press conference.
Malhotra said market volatility continues and RBI’s effort is always to reduce abnormal or excessive volatility.
“And we will continue to strive for that,” he added.
The RBI this month announced three-year USD/INR Call and Sell swaps worth USD 5 billion in its bimonthly monetary policy.
When asked if the USD-INR swap was aimed at checking the depreciation of the rupee, Malhotra said, “It is a liquidity measure. Not to support the rupee.” Emphasizing that the RBI did not target any particular rupee level against the US dollar, Malhotra said the central bank allowed “the rupee to find the right position, the right level”.
The governor also said that the country has adequate foreign exchange reserves and the current account is manageable and given the strong fundamentals of the economy, the country should witness good capital flows in the future.
Foreign portfolio investment (FPI) into India has recorded a net outflow of US$ 0.7 billion in 2025-26 so far (April-Dec03) due to incessant withdrawal from the equity segment.
Foreign commercial borrowings and flows in foreign deposit accounts slowed down compared to last year.
As of November 28, 2025, India’s foreign exchange reserves stood at USD 686.2 billion, providing strong import protection for over 11 months.
The President also said that after reducing the policy rate (repo) by 25 basis points, the focus will now be on transferring the interest rate cut to the real economy.
According to the RBI’s November bulletin, the depreciation of the rupee in October was due to the strengthening dollar following the US Fed’s policy announcement to reduce the Federal funds rate.
However, strong fundamentals such as stable inflation, a resilient growth outlook for the Indian economy, a narrower current account deficit, stable services exports, strong private remittances and strong foreign exchange reserves have contributed to the rupee being the least volatile among emerging markets and developing economies.
The Rupee has outperformed the Euro and its depreciation has been in line with other currencies such as the Japanese Yen and Korean Won (April-November 2025-26).
In the last 3 years, the Central Bank had announced various measures to diversify and expand foreign exchange funding sources in order to reduce exchange rate volatility and reduce global spread.
In October, the RBI’s bi-monthly policy had announced some measures to increase the use of rupee in international trade.
