India should not deplete reserves to defend rupee, ex-RBI chief Rajan says
INDA•Former Reserve Bank of India Governor Raghuram Rajan said India should not run down foreign exchange reserves to defend the rupee, which has fallen about 6% in 2026. India has used about half of the more than $140 billion secured through special measures earlier this year.
1. Rajan urges long-term view
Raghuram Rajan said India should not fixate on a particular rupee level or panic over its depreciation. He said some currency weakness can help make Indian goods more competitive and support exports.
2. Reserves and oil risks
The rupee has fallen about 6% in 2026 and hit a record low of 96.96 in May. Rajan said it would be a shame to quickly spend money raised through FCNR(B) deposits defending a currency level, while warning that a wider current account deficit could follow if oil prices remain elevated. India has deployed about half of the more than $140 billion secured through special measures earlier this year.
