RBI May Roll Out More Measures to Check Rupee Volatility, Says FM Nirmala Sitharaman — October 13, 2026

Union Finance Minister Nirmala Sitharaman indicated that the Reserve Bank of India (RBI) could introduce additional regulatory measures to curb excessive volatility in the foreign exchange market. Speaking at the Bloomberg New Economy Forum in New Delhi, the minister clarified that the central bank’s operational priority remains containing unruly currency swings rather than pegging the rupee to a predetermined level.

"I am sure there are measures the central bank would take further to make sure that the rupee does not become too volatile," Sitharaman stated. She highlighted that while the rupee has faced pressure, the RBI has been acting through calibrated regulatory mechanisms to anchor foreign exchange stability.

Forex Interventions and Derivative Curbs

The Finance Minister's statements follow strong market action by the banking regulator earlier in the week. The Indian rupee recorded its sharpest single-day gain in six months after the RBI intervened via dollar sales and introduced tighter controls designed to squeeze dollar demand in the spot and derivatives segments.

To reinforce stability, the central bank has executed a string of administrative adjustments:

• Stricter Hedging Norms: The RBI widened the scope of the cash deposit requirement for foreign-exchange hedges, applying it universally to all transactions, including hedging used for banks' own balance sheet assets and liabilities.
• Curbing Speculative Derivatives: Rules governing non-deliverable foreign-exchange derivatives were tightened. Banks operating units within India's International Financial Services Centre (IFSC) and designated primary dealers—previously permitted to offer non-deliverable rupee derivatives to non-residents for open exposure—are now restricted to offering them exclusively for genuine hedging purposes.
• Liquidity and Import Channels: Measures also encompass a dedicated dollar window for domestic oil marketing companies through select banks, significantly dampening bulky dollar bidding in the open spot market.

Implications for Indian Markets and Importers

The central bank's active stance is intended to curb speculative positioning against the local unit amid geopolitical uncertainties, global dollar strength, and crude oil price dynamics.

For Indian corporates and capital market participants, these interventions offer significant takeaways:

Market Sentiment and Equity Inflows Currency volatility has historically triggered abrupt foreign portfolio investor (FPI) outflows from Indian equity benchmarks. A stable rupee framework anchored by decisive RBI action helps lower imported inflation risks and reassures foreign institutional capital about currency risk.

Relief for Importers and Corporate Borrowers Importers and firms carrying unhedged external commercial borrowings (ECBs) face reduced risk of sudden payment shocks. While tighter derivatives compliance increases the procedural cost of hedging, it reduces systemic downside tail risks caused by speculative offshore trading.

The central bank and the government maintain that India's underlying macroeconomic fundamentals remain sound, and monetary authorities will continue intervening prudently whenever sharp, disorderly fluctuations threaten broader financial stability.

Tags: Reserve Bank of India Nirmala Sitharaman Ministry of Finance Indian Rupee Forex Market IFSC