We don’t target any band for rupee: Guv
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Mumbai: Bank Governor Sanjay Malhotra on Friday said the central bank does not target any band for the rupee in the forex market, and allows the domestic currency to find its own correct level. The governor’s statement came at a time when the rupee breached the 90-mark against the US dollar, and is hovering near that level.
“We don’t target any price levels or any bands. We allow the markets to determine the prices. We believe that markets, especially in the long run, are very efficient. It’s a very deep market,” he said while replying to a question on rupee depreciation at a post-monetary policy press meet. Malhotra said fluctuations in the market keep taking place, and the effort of the RBI is always to reduce any abnormal or excessive volatility.
“And that is what we will continue to endeavour,” he added.
In its bi-monthly monetary policy, the RBI announced three-year $/Re Buy Sell swaps of $5 billion this month.
When asked if the $-Re swap is aimed at checking rupee depreciation, Malhotra said, “It is a liquidity measure. It is not to support the rupee”.
