Rajan Says India Should Not Drain Reserves

Former RBI governor Raghuram Rajan warns India against depleting foreign exchange reserves to defend the weakening rupee amid rising oil prices and global market pressures.

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Former Reserve Bank of India governor Raghuram Rajan participates in a seminar titled “The Evolving Art of Monetary Policy in Emerging Markets” during the 2025 annual IMF/World Bank Spring Meetings in Washington, D.C., U.S., April 25, 2025. REUTERS/Elizabeth Frantz

India should avoid depleting foreign exchange reserves to defend the rupee, former central bank governor Raghuram Rajan said during a Tuesday interview. The currency has lost 6% of its value this year, hitting a record low of 96.96 in May. The warning comes as emerging markets face persistent external pressures from elevated commodity prices and capital outflows.