RBI to continue efforts to curb rupee volatility; external factors driving currency fall: Nirmala Sitharaman

Finance Minister Nirmala Sitharaman on Tuesday (October 13, 2026) said that she would listen to all views regarding the long-term capital gains (LTCG) tax and the securities transaction tax (STT). However, she refrained from stating whether the matter would be considered during the ongoing discussions in the preparations of Budget 2027.

Just the indication that she would listen to views on the taxation matter led to the stock market jumping 1% soon after she said it. The Finance Minister also said that the Reserve Bank of India (RBI) would continue to take action to prevent volatility in the rupee exchange rate. 

“The long term capital gains tax is something on which a lot of people have been commenting, both the investors within India and also those who meet me occasionally outside in India,” Ms. Sitharaman said at an event in Delhi. 

She added that several Ministers had also raised the issue of the STT, saying that it was running parallel with the LTCG and that India should impose one or the other.  

“So, it’s healthy to have this debate and I will be keenly hearing them,” Ms. Sitharaman said. 

However, the Finance Minister also said that, since the Budget 2027 preparations have started, she would not comment on whether the issue would be discussed during the pre-budget meetings or not. 

RBI to continue rupee actions

“The rupee has reached a low, and the RBI is making a lot of efforts through its regulatory powers to make sure that the rupee stays stable,” Ms. Sitharaman said. “They are not trying to fix the rupee; they are trying to stop the volatility.”

“These efforts from the RBI, I understand, will continue,” she added. “I’m sure there are efforts which the RBI would take further to make sure that rupee doesn’t become too volatile.”

The RBI has, over the last few weeks, announced several steps to shore up the rupee, the latest of which, announced on Saturday (October 10), was to redirect the dollar purchases of oil companies away from the spot market, and to tighten hedging rules.

Regarding the outflows of capital from India, the Finance Minister explained that economies around the world were seeing capital flowing to the U.S. and particularly to frontier Artificial Intelligence (AI) development.

However, she added that there is more conventional AI development taking place within India that should also be attractive to investors.