New Delhi, Oct. 27 -- India should avoid panicking over the rupee's depreciation and resist the temptation to defend it at any cost, former Reserve Bank of India (RBI) governor Raghuram Rajan has said, as high crude oil prices, rising US Treasury yields and foreign investor outflows put pressure on the currency.

In an interview with Reuters at the Global Markets Forum on Tuesday, October 27, Rajan said policymakers should not "fixate on a number" for the rupee's value or rapidly deplete foreign exchange reserves to defend a particular exchange rate.

"I think the first response would be, don't panic," Rajan said, warning that India's current account deficit could widen further if oil prices remained elevated.

The Indian rupee has lost a...