India Central Bank Unveils Rupee Support Measures While Holding Benchmark Rate

India’s central bank announced a series of measures to support the rupee after the currency fell to a record low, while keeping its benchmark interest rate unchanged to support the economy. According to Jin10, Governor Sanjay Malhotra said on Friday that the exchange-rate measures were expected to strengthen the country’s balance of payments. He said the central bank would continue to make appropriate policy adjustments as needed to further promote exports and attract, encourage, and incentivize capital inflows. The steps taken on Friday highlighted that the Reserve Bank of India remained determined to support economic growth even as inflation risks rose due to surging energy costs linked to the Iran war. The central bank appeared reluctant to raise interest rates to curb price pressures, opting instead for other measures to prevent further rupee depreciation. The Reserve Bank of India currently expects inflation for the fiscal year ending March 2027 to reach 5.1%, up from its previous forecast of 4.6% and above its 4% target. Malhotra said the central bank was waiting for the inflation outlook to become clearer before taking further action.