Former Reserve Bank of India Governor Raghuram Rajan urges policymakers not to use foreign exchange reserves to defend a specific rupee exchange rate. He cautions that exhausting reserves to target the currency can become a “trap,” and says authorities should focus instead on broader economic fundamentals and longer-term conditions.
Rajan also frames some rupee depreciation as potentially helpful rather than harmful. He argues moderate weakness can support Indian exports by improving competitiveness, especially when exporters face global headwinds. At the same time, he warns that persistently high crude oil prices can worsen India’s current account position, adding pressure to the currency.
The outlets largely agree on Rajan’s core message: avoid reserve depletion for exchange-rate targeting and take a wider view of what drives the rupee. One outlet adds contextual details about the scale and timing of market pressures, while another emphasizes the policy logic more directly.
