India’s rupee holds firm as RBI flags resilient fundamentals despite global shocks

KUALA LUMPUR, 6 AUGUST 2026 —

RBI Governor Sanjay Malhotra said on Friday the rupee’s performance remains normal despite a stronger US dollar driven by the West Asia war, as India’s external buffers absorb the shock.

The central bank chief told reporters the currency’s resilience reflects rising services exports, record foreign direct investment of RM37.4 billion in May and steady remittance inflows of RM22.1 billion in the same month. He added that newly implemented trade agreements will further support outbound shipments and cushion the economy from external volatility.

Malhotra acknowledged risks including the West Asia conflict and the threat of a weak monsoon, but stressed India’s external sector is well-fortified. The governor noted that while the dollar has strengthened globally, India’s rupee has held ground—trading at about 83.5 per dollar compared with 82.8 at the end of March—showing underlying stability. Services exports rose 12% in the quarter to June, while remittances climbed 8% from a year earlier, he said.

Inflation currently sits at 4%, driven mainly by supply-side pressures tied to higher global oil prices after renewed US-Iran hostilities disrupted ship movements through the Strait of Hormuz. The RBI has kept its benchmark policy rate unchanged at 5.25% this year to balance growth with price stability.

For Malaysian business readers, India’s steady rupee and strong external buffers reduce the risk of sudden capital outflows that could tighten regional liquidity conditions.