Amid growing concerns about a weaker rupee, the Reserve Bank of India (RBI) Governor Shaktikanta Das has said that the rupee is holding up relatively well when compared to the currencies of emerging market peers and advanced economies.
The statement came days after the domestic currency breached the 80-level against the dollar. The RBI Governor also noted that the Reserve Bank of India has zero tolerance for volatile and bumpy movement in the rupee and added that the central bank's actions have helped in smoother movement.
Besides, he said that the RBI has been supplying US dollars to the market to ensure an adequate supply of liquidity to the market and also clarified that the central bank does not target a particular level for the currency. Das said there was no need to be alarmed by unhedged exposures to foreign borrowings. The bulk of such exposures are by state-owned companies and the government can pitch in with help if need be.
On the inflation front, Shaktikanta Das said that the inflation targeting framework has worked well since adopting it in 2016 and stressed that the same should continue in the interest of the economy and the financial sector.