RBI Governor Sanjay Malhotra says central bank targets volatility, not rupee level
The Reserve Bank of India intervenes in foreign exchange markets solely to prevent excessive volatility while macroeconomic fundamentals remain strong, Governor Sanjay Malhotra says.
Forex intervention and currency stability
The Reserve Bank of India does not target any specific exchange rate for the rupee against the US dollar, focusing instead on curbing market volatility to maintain economic stability, RBI Governor Sanjay Malhotra said on Friday.
Speaking during an interactive session at the NDTV World Summit 2026 in New Delhi, Malhotra explained that central bank intervention in foreign exchange markets is strictly aimed at curbing speculative activity and preventing excessive fluctuations.
"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," Malhotra said. "We have not hesitated, as you have seen in the past, to take measures as may be necessary to curb what we may feel is speculative behaviour or if there is excessive volatility."
His comments follow recent movements in the currency market, where the rupee neared Rs 97 per dollar before executing a sustained recovery. The currency strengthened across eight consecutive trading sessions to hit its highest point in four months, before easing slightly to Rs 94.83 per dollar on Thursday.
Strong economic fundamentals and growth momentum
Malhotra stressed that India's underlying macroeconomic fundamentals remain exceptionally strong, anchored by consistent high growth and prudent monetary management. He pointed to India's recent GDP expansion of 7.8 per cent as clear evidence of the economy's underlying momentum.
| Economic Indicator | Value | Period / Context |
|---|---|---|
| GDP Growth Rate | 7.8% | Recent performance |
| Recent Rupee Level | Rs 94.83 per USD | Following 8-day recovery |
| Past Decade Inflation Average | 4.7% | 10-year track record |
| Previous Period Inflation Average | 7.4% | Four years prior to past decade |
Addressing price trends, Malhotra described current inflation pressures as elevated but well within the central bank's designated tolerance framework. He emphasised that long-term price stability has improved significantly over the past decade, with India's average inflation rate standing at 4.7 per cent.
That represents a notable drop from the 7.4 per cent average recorded in the four years preceding this period, demonstrating sustained long-term economic management and stability.
Key numbers
| What | Figure | Source |
|---|---|---|
| Latest GDP Growth Rate | 7.8% | RBI Governor Sanjay Malhotra |
| Rupee Exchange Rate | Rs 94.83 per US dollar | RBI Governor Sanjay Malhotra |
| Past Decade Average Inflation Rate | 4.7% | RBI Governor Sanjay Malhotra |
| Preceding Four-Year Average Inflation Rate | 7.4% | RBI Governor Sanjay Malhotra |
In this story
| Name | Role in the story |
|---|---|
| Sanjay Malhotra | Governor of the Reserve Bank of India who made the statements on forex policy and economic fundamentals. |
| India | Country whose economy, currency, and GDP growth were discussed. |
| Reserve Bank of India | India's central bank responsible for monetary policy and foreign exchange market management. |
