RBI on Rupee News: Rupee is among the worst performing major currencies this year. This year its price has fallen more than the dollar. A big statement from Reserve Bank of India (RBI) Governor Sanjay Malhotra has come out regarding the sharp fall in the rupee against the dollar. He has said that after the current fall, the rupee is no longer expensive but may become undervalued.

So far in the year 2026, the Indian Rupee has weakened by about 7% against the US Dollar. Even before the war between Iran and America, there was pressure on the rupee due to withdrawal of money by foreign investors, but due to increasing Middle East tension and rise in crude oil prices, the fall accelerated.

What is undervalued currency?

First of all, it should be noted that a currency is considered undervalued when its market transaction rate yield is weaker than the required rate as per the basic fundamentals. In simple words, if the rupee is trading below its fair or equilibrium value, economists can call it undervalued.

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In an interview given to the media, RBI Governor Sanjay Malhotra said, after the recent fall of the rupee, this currency is not going to look very expensive. Rather, it could be a low value i.e. undervalued currency. These days the rupee has fallen significantly against the dollar and has crossed 90. It is the market forces that decide what the correct value of the rupee should be. RBI does not target any particular level.

Reason for falling rupee?

There are many reasons behind the weakening of the rupee. The biggest reason is the increasing demand for dollars. Foreign companies and investors are buying dollars. Besides, the prices of crude oil have increased in the international market. India imports most of its oil from abroad. In such a situation, the need for dollars increases and a fall in the rupee is inevitable.

RBI’s preparation amid inflation war

Sanjay Malhotra said, the objective of RBI is still to control inflation. He said that the Central Bank is currently maintaining its Neutral Policy Stance and is fully prepared to take action as per the situation if needed. According to the Governor, despite rising crude oil prices and global tensions, India’s economic condition remains strong.

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Challenge for RBI

Despite the weakening of the rupee, RBI’s policy is clear that there is no fixed level for the rupee. There is confidence in the depth of the market. The Governor said that the Indian banking system is now stronger than before. Forex reserves are at a good level. With this, now economists will have to accept that the rupee should be completely left on the market. Excessive interference may reduce the stock. At present the rupee is above 90 but in the long run it can be stable due to India’s strong fundamentals.