SBI Research Advocates for RBI Action to Address Rupee's Rapid Depreciation
SBI Research urges RBI intervention as rupee depreciation is reckless

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SBI Research has urged the Reserve Bank of India (RBI) to intervene as the rupee's depreciation against the US dollar is deemed excessive. The report highlights that the rupee fell sharply from ₹90 to ₹95 in just 152 days, despite strong economic fundamentals and adequate foreign exchange reserves.
- 01The rupee depreciated by ₹5 against the US dollar in just 152 days, reaching ₹96.83 on May 20.
- 02India's foreign exchange reserves, currently around $680 billion, are deemed sufficient for RBI intervention.
- 03SBI Research attributes the rupee's decline to global dollar strength and significant foreign institutional investor (FII) outflows of $22.7 billion since the West Asia conflict began.
- 04The report suggests that the rupee is undervalued compared to India's economic fundamentals.
- 05SBI Research expects the RBI to maintain current interest rates while addressing currency volatility.
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SBI Research has called for increased intervention by the Reserve Bank of India (RBI) to counter the rapid depreciation of the Indian rupee, which has fallen sharply against the US dollar. The report emphasizes that the rupee's decline from ₹90 to ₹95 in just 152 days is excessive given India's strong economic indicators. It notes that while foreign exchange reserves have decreased by about $47 billion since February 2026, they remain robust at approximately $680 billion, providing the RBI with ample capacity to stabilize the currency. The depreciation is attributed to global dollar strength and significant foreign portfolio outflows, totaling $22.7 billion since the onset of conflict in West Asia. SBI Research argues that the rupee is undervalued and not aligned with India's macroeconomic fundamentals. Looking ahead, the report anticipates that the RBI will keep interest rates steady in the upcoming Monetary Policy Committee meeting, while continuing to utilize its tools to manage currency volatility and ensure orderly market conditions.
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The depreciation of the rupee could lead to increased costs for imports, affecting inflation and consumer prices in India.
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