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RBI Governor: No Target Level for Rupee
13 Jan
Summary
- RBI does not target any specific currency level.
- Intervention occurs only to curb excessive volatility.
- Exchange rate policy prioritizes financial stability.
The Reserve Bank of India (RBI) has affirmed that it does not target specific exchange rate levels for the rupee, clarifying that intervention in the currency market is exclusively to address undue volatility. Governor Sanjay Malhotra emphasized this stance in an exclusive interview.
Malhotra explained that India's exchange rate policy has been consistent for years. The markets are allowed to set currency prices, with the RBI focusing on maintaining financial stability and ensuring orderly movements. Intervention is reserved for situations involving sharp depreciation or appreciation that create excessive volatility.
This approach underscores the central bank's commitment to a stable financial environment without dictating specific currency valuations. The focus remains on managing fluctuations rather than targeting a particular rupee-to-dollar ratio.
