Why did the Indian rupee strengthen recently, and what key statements did the RBI Governor make about its valuation?

The Indian rupee strengthened due to a drop in oil prices—Brent crude fell below $100 a barrel—fueled by hopes of a US-Iran deal, and because Reserve Bank of India (RBI) Governor Sanjay Malhotra stated in a Mint interview that the currency 'may be undervalued' following its recent slide against the dollar. The rupee rose 0.4% to 95.3425 per dollar on Monday and gained around 1.5% over the prior three trading sessions, partly supported by central bank interventions. Malhotra’s comment is notable because it is unusual for the RBI Governor to publicly assess the rupee’s valuation, especially during a period of one-sided depreciation driven by record foreign outflows from Indian stocks and pressure from high crude import costs stemming from the war-related oil price shock.

What measures has the RBI taken recently to stabilize the rupee, and what further options is it considering?

The RBI has taken aggressive measures over the past couple of months to curb speculation against the rupee, including imposing a temporary clampdown on offshore market activity—though these actions delivered only a brief reprieve. Persistent concerns over India’s reliance on expensive crude imports and ongoing dollar outflows continued to weaken the currency. According to a Bloomberg News report cited in the article, the RBI is now considering all available options to stabilize the rupee, specifically naming an interest rate hike, additional currency swaps, and raising dollars from overseas investors as potential tools.

India Rupee Climbs on Oil Relief, Central Bank Valuation Comment

May 24, 2026

India's rupee gained ground as Brent crude dropped below $100 per barrel and the central bank governor signaled potential undervaluation. The RBI is weighing stabilization measures, including rate hikes, to manage currency volatility driven by expensive crude imports.

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