India should not deplete reserves to defend rupee, former RBI chief Rajan says
BusinessLine 1 hr ago·27 Oct 2026, 8:40 am
Former Reserve Bank of India (RBI) Governor Raghuram Rajan has suggested that India should avoid using its foreign exchange reserves to aggressively defend the rupee against depreciation. He argues that depleting these reserves to prop up the currency is not a sustainable strategy and could weaken the nation's financial position in the long run.
This perspective matters to investors because the rupee's value directly impacts the cost of imported goods and the competitiveness of Indian exports. Rajan believes that a modest weakening of the currency can actually benefit the economy by making Indian goods cheaper and more attractive to foreign buyers.
Investors should watch how the RBI manages the rupee in the coming weeks. The central bank will likely balance the need for currency stability with the goal of maintaining healthy foreign exchange levels to support future economic growth.
Excerpt from BusinessLine
India should not "fixate on a number" for its currency level or run down foreign exchange reserves to defend the rupee , Raghuram Rajan, former Reserve Bank of India governor, said in an interview with Reuters on Tuesday. The rupee has lost about 6 per cent of its value so far in 2026, making it the second-worst…Read the original at BusinessLine
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