The story so far: The Reserve Bank of India (RBI) Governor Sanjay Malhotra, in a recent interview with Business Line, reiterated that the Indian rupee is “undervalued”. This has drawn attention because central bankers rarely comment on whether a currency is priced fairly. Answering a question from one of the four journalists who on Sunday (July 26, 2026) interviewed him, Mr Malhotra reportedly said, “I would like to reiterate that it would be reasonable to think that the rupee is not overvalued. If anything, one could argue that the rupee has become undervalued both in nominal and in REER (real effective exchange rate) terms.”
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He added that the RBI does not target any specific exchange rate or band for the rupee.
Answering a direct question from Bloomberg journalist Anup Roy during the June 5, 2026, post-Monetary Policy press conference, Mr. Malhotra, though initially disagreeing that he had made any such statement during an interview with The Mint, said, “It is reasonable to think that it [Rupee] may not be overvalued.”
“Some people do say that it is undervalued in terms of REER if they look at. By some accounts, it is undervalued,” he had stated.
