14 October,2026 10:55 AM IST | New Delhi | mid-day online correspondent
Uday Kotak. File picture.
The rupee should be allowed to determine its own level, Kotak Mahindra Bank Founder Uday Kotak said on Tuesday, while asserting that the underlying strength of the Indian economy will reflect in the currency over time, according to news agency PTI.
"My personal view is we should let the rupee find its own level, and over time, the true strength of the economy will play out," he said at the Bloomberg New Economy Forum 2026.
He highlighted the importance of market forces in determining the currency levels without creating expectations about a particular level that policymakers might seek to defend.
Kotak added that the situation should serve as an important signal for India to strengthen competitiveness, improve efficiency and self-reliance, and invest more in research and innovation.
The veteran bank said he understands what works in financial markets. He added that keeping investors uncertain about the level policymakers may be trying to justify can help prevent markets from anticipating official interventions.
"My view is a practitioner has the ability of speaking what is going to be effective in markets," Kotak said, adding that policymakers should avoid giving markets a specific level to speculate on.
Kotak's remarks come amid the Reserve Bank of India (RBI) announcing measures to stem the rupee's fall, amid persistent foreign fund outflows.
The apex bank on Saturday announced several measures aimed at reducing immediate dollar demand and curbing excessive positions in the foreign exchange market.
The RBI created a special window for oil marketing companies, which will take the dollar demand away from the spot market and tightened rules governing forex derivatives trades to curb speculative bets against the rupee.
In addition, it asked banks to create a 20 per cent reserve for dollar purchases of over USD 2 million.
Following the measures, the rupee appreciated 93 paise, logging its steepest single-day gain in more than six months on Monday, to close at 95.78 against the US dollar, according to PTI. On Tuesday, it appreciated 82 paise to 94.96 against US dollar in early trade.
Finance Minister Nirmala Sitharaman on Tuesday said the RBI will continue its efforts to prevent excessive volatility in the rupee, which has depreciated "very significantly" over the past year and a half.
I am sure there are efforts which the RBI would take further to make sure that rupee doesn't become too volatile," Sitharaman said
She had asserted that the financial regulator was trying to prevent the excessive volatility and not "fix" the rupee.
"So, these efforts from the RBI... will continue not to, as I said, fix the rupee. We would appreciate it if the rupee finds its own (level)," she had said.
(With inputs from PTI)
