Reserve Bank of India (RBI) Governor Sanjay Malhotra has clarified the central bank’s position on currency management, stating that it does not aim to target any specific exchange rate or value for the Indian rupee against the US dollar. During an interactive session at the NDTV World Summit 2026 held in the national capital on Friday, the Governor emphasized that the primary objective of the monetary authority is to ensure orderly conditions within the foreign exchange market.
Addressing the ongoing discourse regarding the rupee's performance, Mr. Malhotra explained that the RBI maintains a hands-off approach concerning the setting of price levels. He noted that the institution intervenes in the currency market only when it is strictly necessary to address sharp fluctuations or speculative activities. By doing so, the central bank aims to provide a stable environment for economic participants rather than defending a particular valuation of the domestic currency.
"We do not target any price or level for the rupee, but, at the same time, it has been our endeavour that we ensure orderly market conditions in the forex markets," the Governor said. He added that the RBI has consistently demonstrated its readiness to take necessary measures when it detects behaviours that might threaten the stability of the currency, affirming that they have not hesitated to act in the past when faced with excessive volatility.
These remarks arrive during a period of intense public and political debate surrounding the recent movement of the rupee. In the weeks leading up to the summit, the Indian currency had approached its lowest-ever valuation, nearing the Rs 97 per dollar mark before beginning a recovery. Following this period, the rupee strengthened for eight consecutive sessions, reaching its highest level in four months, though it subsequently eased to Rs 94.83 against the US currency as of Thursday.
The depreciation of the rupee over the last decade has frequently emerged as a significant political talking point. Critics and opposition parties often point to the weakening currency as a clear indicator of underlying economic stress. Historical data shows that in October 2016, the rupee was trading at approximately Rs 66.83 per dollar, reflecting a rise of nearly 42 per cent in the cost of the US currency over the intervening decade.
Despite these fluctuations, Mr. Malhotra maintained that India's macroeconomic fundamentals remain robust. He pointed to the nation’s recent GDP growth rate of 7.8 per cent as evidence of an economy that possesses underlying strength. According to the Governor, key economic indicators continue to signal health, providing the necessary buffer against international currency pressures.
The Governor also took the opportunity to address concerns regarding the domestic inflation trajectory. He acknowledged that while price pressures are currently elevated, they remain within the central bank’s established tolerance band. Providing historical context to support this stance, Mr. Malhotra noted that the average inflation rate over the past decade stood at 4.7 per cent. This figure, he highlighted, is significantly lower than the average of 7.4 per cent recorded in the four-year period preceding the last decade, suggesting a long-term trend of relative price stability despite modern economic challenges.
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