Rupee holding up ‘relatively well’ compared to advanced economies: Shaktikanta Das

‘Imported inflation is a challenge,’ says the RBI Chief

Reserve Bank Governor Shaktikanta Das on Friday, July 22,2022, said the rupee is holding up relatively well when compared to the currencies of emerging market peers and advanced economies.

Days after the domestic currency breached the 80-level against the dollar, Das said Reserve Bank of India (RBI) has zero tolerance for volatile and bumpy movement in the rupee and added that the central bank actions have helped in smoother movement.

He said RBI has been supplying US dollars to the market to ensure adequate supply of liquidity and also clarified that the central bank does not target a particular level for the currency.

Further, Mr. Das said there was no need to be alarmed by unhedged exposures on foreign borrowings. Bulk of such exposures are by state-owned companies and the government can pitch-in with help if need be, he added.

According to him, 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.

"We should not shift the goal posts to suit the immediate requirements," Mr. Das said.

Speaking at an event organised by Bank of Baroda, he also said that imported inflation is a challenge because India is a key importer of commodities.