|
|
|
'You buy an umbrella to use when it rains': RBI Governor on using forex reserves
|
|
|
|
Top Stories |
|
|
|
|
IANS | 22 Jul, 2022
Due
to the RBI actions, including measures to encourage inflows, the
movements of the rupee have been relatively smooth and orderly, RBI
Governor Shaktikanta Das said on Friday.
Speaking at a
conference, Das said, "By eschewing sudden and volatile shifts, we have
ensured that expectations remain anchored and the forex market functions
in a stable and liquid manner."
Das said in recognition of the
fact that there is a genuine shortfall of supply of forex in the market
relative to demand because of import and debt servicing requirements and
portfolio outflows, the RBI has been supplying US dollars to the market
to ensure that there is adequate forex liquidity.
"After all,
this is the very purpose for which we had accumulated reserves when the
capital inflows were strong. And, may I add, you buy an umbrella to use
when it rains!
"We will continue to engage with the forex market
and ensure that the rupee finds its level in line with its fundamentals.
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," Das said.
Recent
developments in the forex market have generated intense debate,
including predictions of the rupee dropping to record lows as foreign
portfolio funds exit India, Das said and addressed the issue.
Das
said spillovers from the global monetary policy tightening, the
geopolitical situation, the still elevated commodity prices � especially
crude -- and the lingering effects of the pandemic, all coming
together, have become overwhelming for all countries the world over.
Even reserve currencies such as the Japanese yen, the Euro and the
British pound sterling have not been spared.
Portfolio funds are
selling off assets and fleeing to safe haven. Emerging market economies
(EMEs) are particularly affected by capital outflows, currency
depreciations and reserve drawdowns, complicating macroeconomic
management in these countries, he added.
The impact of these
overwhelming spillovers on India has been relatively modest. In fact,
the Indian rupee is holding up well relative to both Advanced and EME
peers, Das said.
"This is because our underlying fundamentals are
strong, resilient and intact. The recovery is gradually strengthening.
The current account deficit is modest. Inflation is stabilizing. The
financial sector is well-capitalised and sound. The external debt to GDP
ratio is declining. The foreign exchange reserves are adequate," Das
added.
|
|
|
|
|
|
|
|
|
|
|
|
|
Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
|
|
Daily Poll |
|
|
PM Modi's recent US visit to redefine India-US bilateral relations |
|
|
|
|
|
Commented Stories |
|
|
|
|
|
|
|
|