RBI to iron out volatile, bumpy movements to ensure rupee finds its level: Das

Reserve Bank of India Governor Shaktikanta Das stressed on Friday that while the central bank was committed to ensuring that the rupee finds its level in line with its fundamentals and does not target any particular level for the rupee, it would intervene decisively to iron out any volatile or bumpy movements in the currency’s exchange rate. “I would like to reiterate that we have no particular level of the rupee in mind, but we would like to ensure its orderly evolution and we have zero tolerance for volatile and bumpy movements,” Mr. Das said, referring to the RBI’s stance on the rupee’s recent depreciation against the U.S. dollar, while addressing a banking conference in Mumbai. Asserting that the Indian rupee was ‘holding up well relative to both advanced and emerging market peers’ due to India’s ‘underlying fundamentals being strong, resilient and intact’, Mr. Das said the RBI’s actions, including measures to encourage inflows, had ensured that the rupee’s movements had been relatively smooth and orderly. Taking into account natural hedges and the exposure of public sector companies, the optimal hedge ratio condition is comfortably satisfied in the case of the stock of ECBs in India’s external debt,” he explained.