India's RBI reports strong economy and urges global rupee expansion

The Reserve Bank of India’s June 2026 Financial Stability Report said India’s macro‑economic fundamentals and the health of banks, non‑bank financial companies and insurers put the country in a better position than many peers to absorb external shocks. While domestic resilience is strong, the report warned that global financial‑stability risks remain elevated, citing public‑debt levels, strained bond markets and high leverage in non‑bank sectors.

RBI Governor Sanjay Malhotra, speaking at the Bank of Russia’s Financial Congress, said extending the rupee’s use internationally would help shield India from currency shocks stemming from the Middle‑East conflict and diversify trade, especially with countries such as those in Africa and with Russia, which has sought alternatives to SWIFT. He highlighted India’s low inflation and robust growth – retail inflation at 3.93% in May and a 7.8% year‑on‑year GDP increase in the March quarter – as a foundation for broader rupee‑denominated transactions.