The Indian rupee may now be undervalued following its recent depreciation, Reserve Bank of India Governor Sanjay Malhotra said in an interview with Mint.

“With the recent depreciation, it would be reasonable to think that rupee is not overvalued. If anything, one could argue that rupee has become undervalued,” Malhotra said. 

The remarks are unusual for an RBI governor, as the central bank typically avoids commenting on the rupee’s valuation or signaling preferred currency levels. The comments also come just ahead of the central bank’s next rate decision on June 5.

In the interview, Malhotra reiterated that the RBI does not target any specific exchange-rate level, adding that the central bank would take all necessary measures to curb speculative movements in the market. He said the RBI has about $700 billion in reserves, along with other tools it can deploy.

“Let me emphasize — we will do whatever is required to ensure orderly price discovery in the forex market,” he said.

The rupee is down over 6 per cent so far this year in Asia’s worst performance. The currency has been largely pressured by equity outflows, which have already exceeded $23 billion this year — surpassing last year’s record. The surge in crude prices since the beginning of the Iran war has also raised the import bill.

A gauge of the rupee’s competitiveness against other currencies stood at 90.96 in April, showing the currency is likely undervalued against peers. This was the lowest since at least 2014. A reading above 100 signals the currency is overvalued.

Malhotra said the balance of payments (BoP) situation was not a huge concern yet. 

“It’s not an undue concern yet it requires some attention in form of concerted efforts by the government, RBI and all institutions concerned,” he said.

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Published on May 25, 2026