ANALYSIS Governor Sanjay Malhotra’s term sees Rupee’s biggest drop since Subbarao’s first 10 months

Indian Rupee

An intense period of global uncertainty has meant that Reserve Bank of India (RBI) Governor Sanjay Malhotra’s term has seen the rupee register its sharpest fall since D Subbarao’s tenure, weakening by 4.77 percent against the dollar while comparing a similar initial 10-month period of recent governors, according to a Moneycontrol analysis.

Governor Malhotra presided over the sharpest rupee depreciation since former RBI Governor Subbarao’s first 10 months between December 11, 2024 and October 28, 2025. This decline has come amid factors such as persistent dollar strength, elevated US yields and sustained foreign portfolio outflows that have pressured most emerging market currencies.

The last time the rupee saw a steeper slide was during Subbarao’s tenure when the currency had plunged nearly 9 percent against the greenback in just over 10 months amid the turbulence of the 2008 global financial crisis. First 10 months of former Governor Subbarao’s tenure was between September 5, 2008 and July 13, 2009.

Since then, the Indian currency has shown greater resilience, especially during the early months of a new governor taking charge, thus making the 4.77 percent slide in rupee noteworthy.

In comparison, the rupee had appreciated 1.23 percent during Shaktikanta Das’ first 10 months in office, 3.08 percent under Urjit Patel, and a sharp 11.68 percent under Raghuram Rajan, when each times the Rupee found ample support from strong capital inflows and improving macroeconomic stability at the time.

Governor Malhotra has seen outflows of foreign funds from equities during most months of his tenure so far, adding to the pressure on the rupee.

The analysis compares similar 10-month windows across governors to maintain consistency. Malhotra’s tenure so far also coincides with a challenging global environment marked by a persistently strong dollar, geopolitical tensions, a widening interest rate differential between India and the US, and an unprecedented levy of tariff by the US.

While the RBI has intervened periodically to smoothen out volatility, it appears to be allowing a calibrated depreciation to preserve foreign exchange reserves and maintain export competitiveness.

According to RBI data, Malhotra has spent net $43.466 billion between December 2024 and August, 2025 to defend rupee from falling sharply.

“We do not target any level or any price band. Our effort has been to manage any undue volatility, and we will continue to do so,” Malhotra had said during the post October monetary policy press conference on October 1.

“There is no reason why it should impact the sentiments or emotions of the public,” Malhotra had added.

Depreciation of domestic currency however is something that was passed on to Malhotra, given that INR started losing stem since late last calendar year. Initially it was the prolonged geopolitical situations such as the Russia-Ukraine war and rising tensions between Israel and Iran, and later the threat of tariffs being imposed by the US.

Domestic factors such as the RBI’s strategy on unwinding portion of short forward currency positions and foreign outflows from domestic equity market have also contributed to the depreciation of Rupee.

The imposition of 50 percent tariffs by US on Indian goods - effective on August 27 - has dampened dollar inflows and negatively impacted domestic market sentiment, reducing export competitiveness and revenue. Tariffs on India are among the highest in the world, including a 25 percent penalty for buying crude oil from Russia.

Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities said market participants have now turned their focus to this week’s US CPI and Core PCE data, which could influence global dollar movement and rupee direction. Support for the rupee is seen near 88.50, while resistance is placed around 87.50.