{
  "id": 14217087,
  "title": "RBI steps in with big measures for rupee, but should it let currency fall instead?",
  "url": "https://urgent.news/2026/10/13/rbi-steps-in-with-big-measures-for-rupee-but-should-it-let-currency",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-13T13:43:37.000Z",
  "source": {
    "name": "Times of India",
    "slug": "times-of-india",
    "url": "https://timesofindia.indiatimes.com/business/india-business/rbis-bazooka-sees-rupee-rising-1-4-versus-dollar-in-two-days-but-should-central-bank-let-it-fall/articleshow/134914850.cms"
  },
  "original_language": "en",
  "account": "The Indian rupee has experienced significant depreciation over the past several quarters, prompting questions about the Reserve Bank of India's (RBI) response. The currency has plummeted to near-record lows of around 97 against the US dollar, driven by factors such as high oil prices, geopolitical tensions, and rising US bond yields. In response, the RBI has taken several measures aimed at stabilizing the rupee and addressing internal and external macroeconomic pressures.\n\nThe RBI has opened a direct dollar-supply window for three state-run oil marketing companies (OMCs), allowing them to shift roughly $10-12 billion per month away from the open spot market. Additionally, the daily cash reserve ratio (CRR) maintenance requirement has been increased to 99%, while the Reserve Bank has announced a Rs 25,000 crore open market operations (OMO) sales to further tighten liquidity in the system. The RBI has also tightened regulations around foreign exchange derivatives, lowering the threshold for taking FX derivative positions without underlying exposure from $100 million to $5 million. Furthermore, the central bank has strengthened documentation requirements to prevent duplicate hedging and introduced a Foreign Exchange Risk Reserve for larger contracts.\n\nWhile these measures have led to a sharp appreciation of the rupee, with the currency closing at 95.24 as of the latest update, the effect may be short-term. Rising US interest rates, global uncertainties, and capital outflows continue to put downward pressure on the rupee. The RBI governor, Sanjay Malhotra, believes the currency is currently undervalued, but this does not necessarily mean a rapid strengthening of the rupee. The RBI's measures are aimed at curbing speculative pressures and volatility, but durable stability in the rupee's value may only be achievable if global tensions ease.\n\nThe immediate costs of a weaker rupee include higher fuel and commodity imports, contributing to inflationary pressures and increased fiscal burdens for a net-importing country like India. While exports may benefit from a depreciating currency, the overall negative impact on India's economy outweighs these benefits. Sujan Hajra, Chief Economist at Anand Rathi Group, notes that the immediate costs of a weaker rupee are especially significant given the high oil prices.\n\nIn the long run, RBI's stance of not targeting any particular level of the rupee versus the dollar means that any intervention will be focused on managing speculative pressures and volatility rather than attempting to engineer a reversal of the currency's depreciation. Meanwhile, the government should also address structural issues related to capital inflows, such as abolishing long-term capital gains tax on equities, to better manage capital outflows.",
  "summary": "One thought process is that the RBI should allow the market forces to let the rupee find its levels. Indeed the IMF recently said that India should allow the exchange rate to act as a shock absorber. Interestingly, RBI governor Sanjay Malhotra believes that the rupee is actually undervalued. What should RBI do?",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 5,
    "also_reported_by": [
      {
        "outlet": "The Economic Times - Economy",
        "title": "RBI may take further measures to curb rupee volatility: FM Sitharaman",
        "url": "https://urgent.news/2026/10/13/rbi-may-take-further-measures-to-curb-rupee-volatility-fm-sitharaman",
        "published": "2026-10-13T08:52:31.000Z"
      },
      {
        "outlet": "Business Standard IN",
        "title": "RBI to continue efforts to prevent excessive rupee volatility: Sitharaman",
        "url": "https://urgent.news/2026/10/13/rbi-to-continue-efforts-to-prevent-excessive-rupee-volatility",
        "published": "2026-10-13T09:20:41.000Z"
      },
      {
        "outlet": "Hindu BusinessLine",
        "title": "RBI to curb rupee volatility amid external pressures, says Finance Minister Sitharaman",
        "url": "https://urgent.news/2026/10/13/rbi-to-curb-rupee-volatility-amid-external-pressures-says-finance",
        "published": "2026-10-13T09:46:11.000Z"
      },
      {
        "outlet": "The Hindu",
        "title": "RBI to continue efforts to curb rupee volatility; external factors driving currency fall: Nirmala Sitharaman",
        "url": "https://urgent.news/2026/10/13/rbi-to-continue-efforts-to-curb-rupee-volatility-external-factors",
        "published": "2026-10-13T11:28:58.000Z"
      }
    ]
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}