RBI Does Not Target Any Price Level for Rupee Says Governor Sanjay Malhotra — October 25, 2026

The Reserve Bank of India (RBI) does not defend or target any specific price level for the Indian rupee against the US dollar, Governor Sanjay Malhotra clarified at the NDTV World Summit 2026 in New Delhi. Instead, the central bank’s interventions are aimed squarely at curbing speculative trading and preventing excessive market volatility to guarantee orderly conditions.

Addressing questions regarding currency management, Governor Malhotra highlighted that while the rupee has historically witnessed phases of depreciation followed by appreciation, the apex bank does not fix exchange rate targets.

"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, and so we have not hesitated to take measures as may be necessary to curb what we may feel is speculative behaviour or if there is excessive volatility," Malhotra said. He added that the central bank's primary objective during market stress is to avert disruptions and disorderly trading.

Currency Volatility and External Pressures

The Governor's statements arrive against the backdrop of heightened currency fluctuations. In recent sessions, the Indian currency approached record low levels near Rs 96.96 to Rs 97 per dollar amid West Asia conflicts, elevated crude oil prices, and foreign capital outflows, before recovering toward the Rs 94.83 per dollar mark.

Malhotra noted that external headwinds have placed strain on emerging market currencies globally. Geopolitical escalations, supply chain bottlenecks, and volatile global commodity prices have complicated the broader central banking mandate.

Key macroeconomic factors highlighted by the RBI Governor include:

• Global Growth Moderation: Global growth is projected at 3.1% by the International Monetary Fund (IMF), accompanied by persistent cross-border inflationary pressures.
• Mandate Priorities: Price stability remains the primary duty of central bankers globally, alongside sustaining domestic growth and safeguarding financial stability.
• Resilient Domestic Fundamentals: India’s underlying macroeconomic backdrop remains strong, anchored by recent GDP growth print of 7.8%, indicating that external pressures rather than domestic weaknesses have driven recent currency swings.

Implications for Indian Investors and Corporates

Governor Malhotra’s remarks offer important guidance for domestic market participants, treasury desks, and corporate borrowers:

• No Synthetic Floor: By establishing that the RBI will not defend an arbitrary numeric threshold, market participants cannot rely on an artificial safety net at specific exchange rate milestones.
• Orderly Adjustment: The commitment to intervene against one-way speculative moves assures importers, foreign institutional investors, and foreign currency borrowers that the RBI retains ample reserves and readiness to smooth sharp intraday swings.
• Hedging Imperative: With the currency subject to global macro dynamics, unhedged corporate exposures remain vulnerable to broader geopolitical and commodity price movements, underscoring the necessity of disciplined foreign exchange risk management.