RBI Governor Sanjay Malhotra on the Rupee: No Red Line at 90 or 91
In an exclusive conversation with NDTV Profit, RBI Governor Sanjay Malhotra stated that the central bank does not target any specific Rupee level, including 90 to the dollar, and intervenes in the currency market only to curb excessive volatility.
Responding to concerns about the Rupee amid geopolitical turbulence, Malhotra said India’s exchange rate policy has remained consistent for years, with markets determining prices while the RBI focuses on financial stability and orderly movement in the currency. Indian economy news has been a major focus for investors and traders in recent times.
Macroeconomic Fundamentals Remain Strong
Malhotra said India’s macroeconomic fundamentals remain strong, citing high growth, low inflation, foreign exchange reserves of about $690 billion, and a manageable current account deficit. Foreign exchange reserves in India have been a key factor in maintaining the country’s economic stability.
“On the whole, on the external front, we are very comfortable,” he said, while noting that currency movements are never linear and involve ups and downs. The Indian stock market news has been closely watching the Rupee’s movement and its impact on the economy.
Rupee Depreciation: A Natural Phenomenon
Over the long term, Malhotra said the Rupee has depreciated by about 3% on average, which he described as natural, given that inflation in India is typically higher than in advanced economies. In the current calendar year, the Rupee has depreciated about 5%, compared with 2.5% in the previous year, keeping the average at around 3.5%.
The Rupee vs Dollar exchange rate has been a major concern for importers and exporters, and the RBI’s stance on the matter has been closely watched. The currency market in India has been volatile in recent times, with the Rupee touching new lows against the Dollar.
RBI’s Role in the Currency Market
The RBI governor reiterated that the RBI does not intervene to defend any specific level such as 90 or 91 to the dollar, and that its actions are only aimed at preventing abnormal or excessive moves in either direction. He described the current phase of the Indian economy as a “Goldilocks” phase, reflecting a balance between growth and stability.
The Indian economy update has been positive, with the country’s GDP growth rate expected to remain high in the coming years. The RBI monetary policy has been instrumental in maintaining the country’s economic stability, and the central bank’s stance on the Rupee has been closely watched by investors and traders.
Impact on Investors and Traders
The RBI’s stance on the Rupee has significant implications for investors and traders in the Indian stock market. The Indian stock market tips suggest that investors should remain cautious and keep a close watch on the Rupee’s movement, as it can have a significant impact on the stock market.
The Nifty and Sensex news has been closely watched by investors and traders, and the RBI’s stance on the Rupee is expected to have a significant impact on the stock market. The stock market analysis suggests that investors should remain cautious and keep a close watch on the Rupee’s movement, as it can have a significant impact on the stock market.
