Finance Minister Nirmala Sitharaman on Tuesday, 13 October 2026 said the Reserve Bank of India (RBI) is expected to continue deploying measures to limit excessive volatility in the foreign exchange market, as the Indian rupee faces sustained pressure from global headwinds. Speaking at the Bloomberg New Economy Forum in New Delhi, she clarified that the central bank's priority was orderly market conditions — not the defence of any specific exchange rate.

What Sitharaman Said

'The RBI is making significant efforts through its regulatory tools to ensure stability in the rupee. They are not trying to fix the rupee at any particular level,' Sitharaman said at the forum. She added: 'My understanding is that these efforts will continue.'

The minister also acknowledged the scale of recent currency weakness. 'The depreciation of the rupee over the last one-and-a-half years has been significant and measures have been taken,' she said, while attributing much of the slide to external factors. 'Several factors contribute to it, and I believe most of them arise from challenges outside the country,' she added.

RBI's Recent Intervention Measures

Her remarks come days after the RBI unveiled a package of steps to calm currency markets following a sharp slide in the rupee. Earlier in October 2026, the central bank opened a special dollar liquidity window for state-owned oil marketing companies. It also tightened rules governing the rebooking of cancelled foreign-exchange derivative contracts and reduced the threshold for certain derivative transactions without underlying exposure from $100 million to $5 million.

The measures appeared to reassure markets. The rupee strengthened to close at 95.78 per dollar on Monday, and on Tuesday it appreciated further by 77 paise to trade at 95.05 against the US dollar in early hours.

Macro Fundamentals and External Pressures

Sitharaman reiterated confidence in India's underlying economic strength, pointing to fiscal discipline and adequate foreign exchange reserves as anchors of stability. She argued that the primary drivers of rupee weakness — including a strong US dollar, elevated global interest rates, and geopolitical uncertainty — originate outside India's borders, limiting the degree to which domestic policy alone can arrest the slide.

This comes amid a broader pattern of emerging-market currency stress, with several Asian peers also recording notable depreciations against the dollar over the same period. Notably, the RBI's interventions mark a more calibrated approach compared to the blunt reserve-drawdown strategy deployed during the 2013 taper tantrum and the 2022 dollar surge.

What to Watch Next

Sitharaman indicated that the central bank would remain vigilant and was prepared to take additional steps if necessary to prevent disruptive movements in the currency market. Market participants will closely track upcoming US Federal Reserve communications, crude oil price trends, and the next RBI monetary policy committee meeting for further signals on the rupee's trajectory.