RBI needs to look beyond defending the rupee

Despite being more volatile than the yen, won and baht over the 2021-25 period, the rupee has remained relatively stable in 2026 4 min readJul 28, 2026 04:28 PM IST First published on: Jul 28, 2026 at 04:28 PM IST The Reserve Bank of India finds itself caught between the challenges of managing inflationary pressures and the sharp depreciation of the rupee. With the bank formally committed to maintaining price stability, the options before it are regulatory tweaks to capital inflows. The Indian rupee is not an outlier, as the dollar has broadly appreciated against a range of currencies. The Indonesian rupiah, Japanese yen and Korean won are among the currencies that have depreciated since the beginning of the war. The exchange rate matters primarily because 45.8 per cent of India’s GDP is a