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No Fixed Exchange Rate In Mind: RBI Governor On Falling Rupee

RBI Governor Shaktikanta Das stated that the US dollar has appreciated by 14.5 per cent against a basket of major currencies, and that has caused turmoil in currency markets

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Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said that the central bank does not have any fixed exchange rate in mind and the rupee's movement against the US dollar has been orderly compared to other currencies.

“First, the rupee is a freely floating currency, and its exchange rate is market-determined. Second, the RBI does not have any fixed exchange rate in mind. It intervenes in the market to curb excessive volatility and anchor expectations," Das said.

Das stated that the US dollar has appreciated by 14.5 per cent against a basket of major currencies, and that has caused turmoil in currency markets.

The rupee hit an all-time low on September 28 when it closed at 81.94 against the US dollar.

Das said a stable exchange rate is a beacon of financial and overall macroeconomic stability and market confidence.

On the Forex Reserves shrinking due to RBI’s intervention, Das said, “Our interventions in the forex market are based on continuous assessment of the prevailing and evolving situation...The aspect of adequacy of forex reserves is always kept in mind. The umbrella continues to be strong.”

He said India’s forex reserves, as on September 23, 2022, stand at USD 537.5 billion and compare favourably with most peer economies.