Sanjay Malhotra, Governor, Reserve Bank of India (RBI)
The Reserve Bank of India does not target any specific level of Indian Rupee (INR), Governor Sanjay Malhotra said here on Thursday. He also assured that the central bank has “very good” buffers of foreign exchange reserves and there is no reason for concern.
“We do not target any level. Why is the rupee depreciating? (It) is because of the demand. It is a financial instrument, and there is a demand for dollars, and if the demand for dollars goes up, the rupee depreciates; if the demand for rupee goes up, dollar comes down, then it appreciates,” Malhotra said while responding to a query after delivering the VKRV Rao Memorial Lecture at the Delhi School of Economics.
He also exuded confidence that India will have a “good trade deal” with the US, and that would relieve the pressure on the country’s current account balance. These remarks have been made at a time when INR has depreciated 3.6 per cent. While trade tensions between India and the US have impacted the INR, foreign portfolio investors have pulled out over $16 billion from India, making the situation challenging.
Rupee depreciates
The rupee depreciated 23 paise to close at 88.71 (provisional) against the US dollar on Thursday, on broad strength of the American currency and fading odds of a rate cut by the US Federal Reserve. Forex traders said the dollar has staged a rally, moving above the 100 level, after the US Federal Reserve minutes indicated that most officials were opposed to a rate cut in December, following the October cut.
Responding to another query on the banking sector, Malhotra said that the way Indian banks are performing, very soon a few of them will be among the top 100 global lenders. Earlier in his speech, he said the foremost priority of the RBI is to ensure financial stability in the system, and the central bank is trying to simplify regulations, where possible, while maintaining necessary safeguards and guardrails.
Published on November 20, 2025
