07 October,2026 04:27 PM IST | Mumbai | mid-day online correspondent
RBI Governor Sanjay Malhotra. File picture
Reserve Bank of India (RBI) Governor Sanjay Malhotra on Wednesday said that the regulator will ensure the rupee stabilises and will support it in reaching its correct value, according to news agency PTI.
His remarks come amid the currency declining well below the psychological benchmark of 96 against the US dollar in the recent days and inching towards its all-time low of 96.96 against the dollar, during intraday trading on Wednesday.
He pointed out that while markets can be "irrational" in the short term, they reflect their right value in the long run.
"We will ensure that the rupee stabilises, that the rupee finds its correct value, and we will support an orderly movement of the rupee in finding its correct value and at the same time in ensuring that there is no excessive volatility," the Governor told reporters at the central bank headquarters here.
The rupee has been under pressure since the beginning of the West Asia conflict in late February. The elevated crude oil prices pose a challenge to an oil-importing country like India. India is the third largest importer and consumer of crude oil.
"By a number of estimates, including the REER (Real Effective Exchange Rate), the rupee is not overvalued; it may be undervalued," Malhotra said.
Earlier, RBI Deputy Governor Poonam Gupta had termed the rupee's 13.1 per cent depreciation over the past one-and-a-half years as a temporary phenomenon, and had said that there is a fair case for the rupee to stabilise and appreciate from here on.
The central bank had introduced a concessional FCNR swap facility on June 8 as part of the broader goal, including to arrest the decline in rupee but the Indian currency has depreciated in the last few sessions.
The government and RBI to encourage capital inflows to boost India's balance of payments during global uncertainty had launched the swap facility. Under this facility, banks could mobilise new FCNR-B deposits and exchange the dollars with the RBI at a lower, concessional rate.
The RBI mobilised a record USD 127.23 billion through Foreign Currency Non-Resident (Bank), or FCNR(B), deposits, as of August 31. Including overseas foreign-currency borrowings (OFCB) worth USD 5.3 billion and external commercial borrowings (ECB) of USD 3.9 billion, the total inflows under the measures reached USD 136.377 billion.
Foreign Currency Non-Resident (Bank) or FCNR (B) deposits is a fixed-term deposit account that allows non-resident Indians (NRIs), persons of Indian origin, or overseas citizens of India to maintain a fixed deposit in specified foreign currencies. The RBI permits these deposits to encourage foreign currency inflows that helps to safeguard the rupee against depreciation and to strengthen India's foreign exchange reserves.
(With inputs from PTI)
