New Delhi, May 30 -- Dear reader,

As the rupee flirts with the psychologically significant 100-per-dollar mark amid the West Asia conflict, Reserve Bank of India governor Sanjay Malhotra struck a calm but watchful tone. In an interview with Mint, Malhotra argued that the rupee may actually be undervalued after its recent slide, stressing that the RBI does not defend any fixed exchange-rate level and intervenes only to curb excessive volatility or speculation.

Despite rising crude prices and pressure on India's import bill, Malhotra said the country's balance of payments situation remains "manageable", helped by resilient services exports, steady remittances, and robust foreign investment flows. Gross FDI hit a record $94.5 billion in FY...