RBI to keep checking sharp rupee swings, says Finance Minister

Union Finance Minister Nirmala Sitharaman stated on Tuesday that the Reserve Bank of India will keep working to stop sharp swings in the rupee. She spoke at the Bloomberg New Economy Forum 2026 and noted that the local currency has dropped quite a bit against the U.S. dollar over the last year and a half. Global uncertainties are the main reason for this fall, even though India's core economic health and foreign exchange reserves remain solid.

RBI Steps and Market Impact

The central bank does not want to fix a specific rate for the rupee and prefers to let it find its own level. Over the weekend, the RBI rolled out fresh rules to block speculative bets against the local currency and set up a special window for oil marketing companies to take dollar demand away from the open market. These steps helped the currency bounce back by one percent on Monday, and it traded at ninety-four rupees and ninety-six paisa on Tuesday morning.

Budget and Tax Debates

When asked about possible changes to taxes in the securities market, Ms. Sitharaman called the ongoing discussion on the securities transaction tax and long-term capital gains tax healthy and said she is listening closely. Preparations for the Union Budget, which will likely be presented on February first, are already underway. Meanwhile, domestic and foreign private capital continues to flow into growth sectors like renewable energy, semiconductors, and pharmaceuticals.

Context

Central banks use market interventions and special funding windows to manage sudden currency drops caused by global capital outflows. These actions help cushion the domestic economy against imported inflation without fixing the currency at an artificial rate.