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RBI Curbs Rupee Swings, Not Setting Value
26 Oct
Summary
- RBI aims to control sudden rupee fluctuations, not fix its exchange rate.
- Rupee fell for the third consecutive session amid oil prices and tensions.
- India targets a debt-to-GDP ratio of 50% by 2030.
Finance Minister Nirmala Sitharaman stated that the Reserve Bank of India (RBI) is implementing measures to manage sudden movements in the rupee's value, emphasizing that the central bank does not aim to fix the currency's exchange rate. This intervention focuses on preventing sharp fluctuations rather than defending a specific value against the US dollar.
The rupee experienced a decline for the third consecutive session, influenced by rising crude oil prices and geopolitical tensions. This depreciation was also attributed to a stronger dollar and increased US Treasury yields, though domestic equity market recovery provided some support.
Sitharaman reiterated India's fiscal goals, noting a consistent year-on-year decrease in the fiscal deficit. The government is working towards a debt-to-GDP ratio of 50% by the year 2030.
Regarding inflation, the Finance Minister acknowledged external pressures such as the pandemic, global conflicts, and oil price surges. She assured that the central government is continuously implementing measures to mitigate the impact of these developments on the public and to increase per capita income.
