The Reserve Bank of India (RBI) on Wednesday reiterated that its interventions in the foreign exchange market are aimed at curbing excessive volatility and not at targeting any specific level of the rupee.
The central bank kept the policy repo rate unchanged at 5.25 per cent in its first monetary policy announcement for the financial year 2026–27, citing rising global risks and geopolitical tensions.
Speaking during the monetary policy announcement, RBI Governor Sanjay Malhotra said the central bank’s exchange rate policy remains unchanged and continues to be guided by the principle of a market-determined currency.
He noted that despite strong macroeconomic fundamentals, the Indian rupee depreciated more in the last financial year compared to the average movement in the previous year.
Malhotra said RBI interventions are limited to smoothing excessive and disruptive volatility in the foreign exchange market, without targeting any particular price band for the rupee.
The statement comes amid recent fluctuations in the currency. The rupee, which was trading near 91 per US dollar in early March, witnessed heightened volatility and briefly crossed the 95 mark during the month. It has since stabilised and is currently trading around 92.5 per dollar.
The Governor emphasised that the central bank does not aim to defend any specific level of the rupee but steps in to prevent disorderly market movements that may not reflect underlying economic fundamentals.
He added that the RBI will continue to act judiciously to ensure that volatility does not trigger self-fulfilling expectations, which could further amplify currency movements.
-ANI
