RBI Governor Clarifies Stand on Rupee Value Amid Market Volatility

The Reserve Bank of India has no intention of maintaining a fixed exchange rate target for the rupee, RBI Governor Sanjay Malhotra clarified while addressing concerns over recent movements in the domestic currency. He said the central bank’s focus is not on setting a particular value for the rupee but on ensuring stability in the currency market.

The remarks come after the rupee witnessed sharp pressure in recent weeks due to global tensions and rising crude oil prices. The domestic currency had fallen close to the 100 mark against the US dollar, creating concern among investors and market observers.

Speaking on the issue, Malhotra said the rupee cannot be considered overvalued. Instead, he noted that it appears to be trading below its actual value. He emphasized that the RBI only steps into the foreign exchange market when required to curb excessive volatility or speculative movements.

The Governor also highlighted that India continues to maintain a stable balance of payments position despite ongoing global uncertainty and fluctuations in oil prices. He pointed out that foreign institutional investors are continuing to bring strong inflows into the country.

According to Malhotra, maintaining a stronger and stable currency environment requires a broader economic approach, including reducing import dependence and encouraging exports.

Meanwhile, the rupee showed signs of recovery on Monday. The currency strengthened by 40 paise and was trading at 95.20 during the session. Reports suggesting progress toward a possible peace understanding between the United States and Iran helped ease pressure on crude oil prices, giving support to the rupee in the market.