How does a falling rupee affect India’s economy? How does a currency’s exchange rate shape its balance of payments? To what extent does Foreign Portfolio Investment influence demand for the rupee? What strategic role does the Reserve Bank of India play in preventing the rupee’s depreciation?

The Reserve Bank of India sold $9.76 billion in forex in March 2026 as the rupee dropped 4%, its steepest monthly fall since 2019, amid the US-Iran conflict.

The Reserve Bank of India is exploring multiple options to stabilize the rupee, which recently hit a fresh low. These include a potential interest rate hike, increased currency…