RBI to stay out of rupee moves, step in only during excessive volatility: Governor Malhotra

RBI governor Sanjay Malhotra said on Friday (Feb 6, 2026) that the apex bank will keep a distance from routine movements in the foreign exchange market and step in only if volatility turns excessive. The RBI continued the benchmark repo rate unchanged at 5.25 per cent after it announced the monetary policy decision.

The Monetary Policy Committee (MPC), which convened between February 4 and 6, unanimously decided to hold rates unchanged. Governor Malhotra reaffirmed that the Reserve Bank of India does not aim for any particular exchange rate level for the rupee. “Whether it is an up movement or down—depreciation or appreciation—we generally stay away,” he said, and added that RBI will only intervene in the event of abnormal volatility or a speculative build-up, according to Firstpost.

The governor confirmed that there are currently no signs of speculative pressure, even though the rupee has strengthened in recent sessions. The RBI, he added, will continue to let market forces guide the movement of the currency. Following the policy announcement, the rupee traded in a narrow range. After opening near 90.23 against the US dollar, it was quoted at around 90.70 by 2 pm, compared with its previous close of 90.36.

Rise of the rupee after the India-US trade agreement

Earlier in the week, the rupee saw a sharp rise after news of a trade agreement between India and the US. However, ongoing demand for dollars from domestic importers limited the rally and kept the currency from crossing the Rs 90-per-dollar threshold.

Vivek Iyer, Partner and Financial Services Risk Leader at Grant Thornton Bharat, stated that the policy marks a major shift in emphasis. “Taken together, the MPC announcements signal a clear pivot by the RBI from headline monetary easing to targeted regulatory and structural interventions. By holding rates steady while rolling out a wide set of non-rate measures, the RBI is reinforcing that credit transmission, consumer protection and market depth can be strengthened without immediately relying on rate cuts,” he said.