Rupee undervalued on REER basis, set for rebound: Ashima Goyal

Mumbai: Former Monetary Policy Committee member Ashima Goyal said the rupee remains undervalued on a Real Effective Exchange Rate (REER) basis and should appreciate from current levels. Speaking at a debt market conference by CareEdge Ratings, Goyal said that the rupee is highly undervalued in REER terms. "Whenever the rupee is this undervalued, we have seen the currency appreciate in the following year," Goyal said.

According to the 40-Currency REER basket, the rupees rate was at 90.96 as of April 2026, its lowest since 2014. The REER is the weighted average of a country's currency in relation to an index or basket of other major currencies.

The rupee deprecated nearly 11% in FY26, and has weakened nearly 3% in FY27 so far.


Goyals comments come after the Reserve Bank governor spoke to local media, saying that the rupee may be undervalued.

"With the recent depreciation, it would be reasonable to think that the rupee is not overvalued. If anything, one could argue that the rupee has become undervalued," Governor Sanjay Malhotra said. Goyal also said market participants should take a more nuanced view of the decline in India's foreign exchange reserves.