RBI does not set the rupee's rate, says Governor Sanjay Malhotra

News of the Indian rupee falling against the US dollar is heard often. People also ask why the Reserve Bank of India (RBI) does nothing to keep the rupee steady. RBI Governor Sanjay Malhotra has now answered that question himself.

On Friday, Malhotra spoke in defence of the rupee at an event at the NDTV World Summit 2026 in Delhi. Asked whether the rupee's value is set on the basis of the dollar's value, he said the RBI does not fix the rupee's value against the dollar. He made the remark as the rupee has been weakening for some time.

At the summit, Malhotra said the RBI's primary objective is to maintain stability in the foreign exchange market. He said the RBI can act if the rupee swings sharply or if anyone speculates to profit from changes in its value.

He also made clear that the RBI does not try to hold the rupee at a particular level. He said the bank has to take such steps only to prevent sudden changes and volatility in the market.

In recent weeks, the rupee fell to about 97 to a dollar, the first time it had touched such a weak level. It then recovered and stayed strong in trading for eight straight days, reaching its best level in four months. On Thursday it fell again, to 94.83 to a dollar.

In short, Governor Sanjay Malhotra said at the event that the RBI does not decide the rupee's rate, and that the bank has to step in to check sudden market swings and volatility.