‘Deep market’: Why is Rupee left to ‘find its correct level’? Governor Sanjay Malhotra explains stance as currency hovers near 90

Reserve Bank Governor Sanjay Malhotra on Friday said the central bank does not target any specific price level or band for the rupee, and allows the currency to find its own “correct” value in the market, even as it hovers near the 90-per-dollar mark, PTI reported. “We don’t target any price levels or any bands. We allow the markets to determine the prices. We believe that markets, especially in the long run, are very efficient. It’s a very deep market,” Malhotra said at the post-monetary policy press interaction when asked about the rupee’s depreciation. He said fluctuations keep taking place and the RBI’s effort is limited to reducing “abnormal or excessive volatility”. The comment came as the RBI announced three-year USD/INR Buy-Sell swaps of USD 5 billion this month. Asked if the swap move was designed to curb the rupee’s slide, Malhotra said, “It is a liquidity measure. It is not to support the rupee.” He reiterated that the central bank does not target any level for the currency and allows it to find its “correct position, correct level”.Malhotra said India’s foreign exchange reserves remain strong at USD 686.2 billion as of November 28, 2025, providing over 11 months of import cover. He added that the current account is “manageable” and that strong fundamentals should support better capital inflows ahead.Foreign portfolio investment has recorded a net outflow of USD 0.7 billion so far in 2025-26 (April–December 3), driven by ongoing withdrawals from equities, while flows under external commercial borrowings and non-resident deposits have moderated compared to last year.Malhotra also said that after reducing the policy repo rate by 25 basis points, the RBI’s focus is now on ensuring transmission of the rate cut to the broader economy.