India’s new central bank governor, Sanjay Malhotra, appears willing to let the rupee move more freely against regional peers as he continues to intervene to curb sharp volatility, according to a Bloomberg report citing people familiar with the ‘subject.

Malhotra, who took office in December, has been closely reviewing the Reserve Bank of India’s (RBI) currency intervention strategies ahead of its first monetary policy meeting in February.

Under his leadership, the RBI can allow greater flexibility in daily currency fluctuations, breaking away from the tighter controls maintained by his predecessor, Shaktikanta Das. During Das’s six-year tenure, the rupee’s volatility was among the lowest in emerging markets, and the RBI built up more than $700 billion in foreign exchange reserves to defend the currency.

The rupee recently fell to an all-time low of 86.7025 against the dollar before recovering slightly. That decline comes as foreign outflows intensify, with investors pulling $2 billion out of stocks and $705.5 million out of fixed-income securities this year. Rising oil prices and a strong dollar have also weighed on the currency.

The policy change partly responds to exporters’ complaints about the rupee’s stability hurting trade competitiveness. Exporters argued that rival nations allowed their currencies to depreciate, increasing their trade advantages. The rupee’s real effective exchange rate reached 108.14 in November, an 8% overvaluation, prompting calls for a more flexible approach.

Despite allowing for further depreciation, the RBI remains cautious on India’s import bill, which is heavily influenced by oil costs as the nation imports 90% of its crude oil. The central bank plans to closely monitor speculative positions and intervene decisively if necessary to prevent excessive swings.