Good trade deal with US will ease pressure on our current account: RBI Guv Sanjay Malhotra

New Delhi: Reserve Bank governor Sanjay Malhotra Thursday exuded confidence about India clinching a good trade deal with the US, which should ease pressure on the country's current account. He reiterated that the central bank does not target any exchange-rate level and the recent depreciation of the rupee is largely trade-driven.

"We are quite confident that there will be a good trade deal... and that should relieve whatever pressure has been there on our current account," Malhotra said at the VKRV Rao Memorial Lecture at the Delhi School of Economics.

The rupee depreciated 23 paise to close at 88.71 (provisional) against the US dollar on Thursday.

India's forex reserves, he added, remain comfortable at $687.73 billion as of week ended November 7. Current account deficit stood at $2.4 billion (0.2% of GDP) in Q1 FY26, reversing a surplus of $13.5 billion (1.3% of GDP) in the previous quarter.

The US has imposed a 50% tariff on several Indian goods. Earlier this week, Commerce Minister Piyush Goyal said bilateral negotiations were making "positive progress."

"You have seen that there are some tariffs, some additional penal tariffs. As a result of which, expectations have built up that our trade deficit may go down. Now, whether it will happen or not, because a lot of it depends on expectations, and that is one," he said.

Malhotra stressed that the RBI's core priority remains financial stability, noting ongoing efforts to simplify regulations "while maintaining necessary safeguards and guardrails."

On cryptocurrencies, he reiterated India's cautious approach, saying a government-appointed working group will decide "how, if at all, crypto is to be handled" in the country.

Responding to a question on banking consolidation and scale, the governor said India will eventually have "quite a few banks in the top 100 globally" as the economy and financial system expand. "It's only a matter of time before India will have quite a few banks in the top 100 banks of the world," he added.

In response to a question on funds moving away from bank deposits to other instruments, Malhotra said it is something which is natural and it will happen, as it has happened, across the world, but it's best if it happens slowly.

He further noted that a lot of the corporates and NBFCs are now moving from bank borrowing to corporate borrowing and market-based borrowing.

"So, it's not only on the liability side, but even on the asset side, this shift is happening. The point is that it should remain balanced," he added.