India RBI chief says markets can be irrational as rupee returns near record lows - Reuters

The Reserve Bank of India has pushed back against market pressure on the rupee, with Governor Sanjay Malhotra cautioning that currency markets "can be irrational at times," according to Reuters. The comments came as the rupee traded close to its weakest levels on record against the US dollar, a move that reflects persistent strength in the greenback and broad risk aversion rather than any single domestic trigger.

For observers, the episode is a reminder of how emerging-market currencies behave when global forces dominate. A weaker rupee raises import costs, which can feed into inflation, while also improving the competitiveness of exporters. The RBI's phrasing suggests it views the move as sentiment-driven rather than a verdict on India's fundamentals, and it retains tools such as intervention and rate management to smooth volatility.

What to watch: the pace of the rupee's slide, the size of the RBI's foreign-exchange reserves, and any shift in the central bank's verbal guidance. Those signals matter because sustained currency weakness can influence inflation expectations, foreign portfolio flows, and the cost of overseas borrowing for Indian firms.