Malhotra: RBI Will Act Only on Speculation or Sharp Volatility

RBI Governor Sanjay Malhotra has clarified that the central bank is not trying to protect a specific rupee level against the US dollar. According to him, the RBI's core priority is bringing stability to the foreign exchange market.

Speaking on Friday at the NDTV World Summit 2026 in New Delhi, Malhotra said the central bank intervenes only when it needs to address speculative trading or large swings in the currency.

He said the RBI does not aim for any particular price for the rupee. At the same time, he said the bank aims to keep conditions in currency markets orderly. He added that the RBI has previously taken necessary steps whenever it sensed excessive speculation or volatility.

His statement comes amid a heated discussion on the rupee's movement against the dollar. Over recent weeks, the rupee had neared a record low of around 97 per dollar, before showing some signs of recovery.

The currency posted gains for eight consecutive sessions, reaching its strongest level in four months. It softened slightly on Thursday, closing at 94.83 against the US dollar.

The rupee's depreciation over the past few years has become a political topic, with opposition parties portraying the slide as a sign of economic strain.

In October 2016, the rupee was trading at roughly 66.83 per dollar. Over the decade since then, the US dollar has appreciated by approximately 42 per cent against the rupee.

Malhotra argued that India's broader economic base remains strong. He cited the 7.8 per cent GDP growth rate and said major economic indicators point to the economy's internal strength.

On inflation, he said current price pressures are higher than desired but still fall within the central bank's tolerance band. He pointed out that India's average inflation over the past decade was 4.7 per cent, far below the 7.4 per cent average recorded in the preceding four years.