Sitharaman cites "very significant" rupee depreciation while RBI curbs volatility via tightened rules
GS3Economy · S&T · Environment · Security· Monetary policy, RBI & banking· Prelims + Mains·
Currency volatility and forex derivatives: a key GS3 topic regarding monetary policy and macroeconomic stability.
Why in news
Finance Minister Nirmala Sitharaman highlighted 'very significant' rupee depreciation over one and a half years while noting RBI measures to curb volatility.
Background
Finance Minister Nirmala Sitharaman spoke at the Bloomberg New Economy Forum. She noted that the Reserve Bank of India is curbing rupee volatility through a special window for oil marketing companies and tightened forex derivatives rules.
Facts for Prelims
- FactRupee depreciation noted over a period of one and a half years
- BodyReserve Bank of India (RBI) manages forex derivatives rules and oil marketing windows
Prelims practice question
Which body is responsible for managing forex derivatives rules and special windows for oil marketing companies to curb currency volatility?
- (a)Ministry of Finance
- (b)National Bank for Foreign Trade
- (c)Securities and Exchange Board of India
- (d)Reserve Bank of India
Show answer
Answer: (d) Reserve Bank of India — The note states that the Reserve Bank of India is curbing rupee volatility through tightened forex derivatives rules and a special window for oil marketing companies.
For Mains
Q. Discuss the measures taken by the Reserve Bank of India to manage currency volatility and the implications of significant rupee depreciation on India's macroeconomic fundamentals.
Dimensions to cover in your answer
- Monetary policy trade-offs: Balancing currency stability with the necessity of maintaining strong macroeconomic fundamentals
- Regulatory intervention: Impact of tightened forex derivatives rules on market liquidity and hedging capabilities
Keywords: currency volatility · macroeconomic fundamentals · forex derivatives · monetary policy · depreciation
More Economy notes
- Karnataka generates record 2.04 crore person-days of employment under VB-G RAM G scheme · 14 October 2026
- Union Cabinet approves selling 60.72 per cent stake in IDBI Bank to Canada Inc · 14 October 2026
- Chief Minister Devendra Fadnavis announced that 305 out of 358 Maharashtra talukas are now · 14 October 2026
- MSDC to integrate all ports with MSW-Sagar Setu by March 2027 · 14 October 2026
- Suvendu Adhikari inaugurates ₹6,000 crore phenol and acetone plant in Haldia · 14 October 2026
- India's trade deficit with China hits $105.93 billion as imports rise 23.3% · 14 October 2026
Something wrong, or something missing?
Spotted a mistake in a note, or want a topic, format or PDF that would help your preparation? Write to us. We read every mail and fix errors fast.
This note is generated automatically from SatyaDheesh's news feed and mapped to the UPSC CSE syllabus. Check facts against the original report or PIB before using them in an answer.