RBI does not target any level for INR, says Governor Malhotra

Sanjay Malhotra, Governor, Reserve Bank of India (RBI)

Reserve Bank of India Governor Sanjay Malhotra stated that the central bank does not have a specific exchange rate target for the Indian Rupee (INR) during an address in Delhi on Thursday. He emphasized the RBI’s robust foreign exchange reserves as a buffer and assured there was no cause for concern.

“We don’t target particular exchange levels. Currency movements reflect market demand – increased dollar demand leads to rupee depreciation, while stronger rupee demand causes appreciation,” Malhotra explained following his lecture at the Delhi School of Economics.

The Governor expressed confidence about progress in India-US trade negotiations, noting that a successful agreement would ease pressure on India’s current account balance. His comments come amid a 3.6% rupee depreciation this year, exacerbated by foreign portfolio investors withdrawing over $16 billion from Indian markets.

Market Movements

The rupee settled lower at 88.71 against the US dollar on Thursday, influenced by dollar strength and diminished expectations of a Federal Reserve rate cut. Currency traders attributed the dollar’s rally beyond the 100-mark to the Federal Reserve’s October meeting minutes, which revealed most officials favored maintaining rates after their previous cut.

Regarding the banking sector, Malhotra predicted Indian banks would soon feature among the world’s top 100 financial institutions based on their current performance. Earlier in his speech, he highlighted RBI’s commitment to financial stability through simplified regulations that preserve necessary safeguards.

Published on November 20, 2025