Reserve Bank of India (RBI) Governor Sanjay Malhotra on Thursday said the central bank does not aim for any specific exchange rate for the Indian rupee, attributing its recent depreciation to rising global demand for the US dollar.
‘We Do Not Target Any Level’
Speaking at the VKRV Rao Memorial Lecture at the Delhi School of Economics, Malhotra clarified that currency movement is purely a function of market dynamics.
“We do not target any level. The rupee is depreciating because of demand. If the demand for dollars goes up, the rupee depreciates,” he said.
Trade and Tariff Issues Affecting Currency
Malhotra said the recent weakness of the rupee is partly due to trade-related pressures and US tariff concerns, but expressed confidence that India and the US will reach a favourable trade agreement that may ease the current account situation.
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‘External Sector Strong; No Cause for Concern’
The RBI Governor underlined that India’s foreign exchange reserves remain robust, ensuring stability in the external sector.
“There is no need for concern. Our forex reserves are very good,” he added.
Regulatory Simplification and Banking Sector Outlook
Malhotra said RBI continues to prioritise financial stability, while working to simplify regulations with appropriate safeguards.
He also noted that India’s banking sector is improving rapidly and predicted that a few Indian banks may soon enter the list of the world’s top 100 lenders.
Rupee Closes at 88.71 Against US Dollar
The rupee closed at ₹88.71 per US dollar, down 23 paise, as the dollar strengthened globally after US Federal Reserve minutes showed opposition to a December rate cut. Forex traders said the dollar index has surged past the 100 mark as investors reassess Fed policy expectations.
