RBI – The New Indian Express

Express press service

NEW DELHI: Easing fears of rupee depreciation, Reserve Bank of India (RBI) Governor Shaktikanta Das said on Friday that the Indian rupee is holding up well against advanced and emerging market economies due strong, resilient and intact underlying fundamentals .

“The recovery is gradually strengthening. The current account deficit is modest. Inflation stabilizes. The financial sector is well capitalized and solid. The external debt/GDP ratio is falling. Foreign exchange reserves are adequate,” Das told the Bank of Baroda economic conference. He underscored the bleak global picture given inflationary pressures, tight external financing situation and financial stability issues in many countries.

In the meantime, the Governor has acknowledged the fact that there is a genuine shortfall of currency supply in the market relative to demand due to import and debt service requirements and portfolio outflows. . He said the apex bank provides US dollars to the market to ensure there is adequate foreign exchange liquidity. Additionally, Das said a considerable portion of the outstanding external commercial borrowing (ECB) is hedged.

For India, according to RBI internal research estimates, the optimal coverage ratio is 63%. “Given the natural hedges and public sector corporate exposure, the optimal hedge ratio condition is comfortably met in the case of the ECB stock in India’s external debt,” he said. he adds. Following RBI’s actions, the rupiah’s movements have been relatively smooth and orderly, according to Das.

“We will continue to engage in the FX market and ensure that the Rupee regains its level in line with its fundamentals. I would like to reiterate that we do not have any 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.

NEW DELHI: Easing fears of rupee depreciation, Reserve Bank of India (RBI) Governor Shaktikanta Das said on Friday that the Indian rupee is holding up well against advanced and emerging market economies due strong, resilient and intact underlying fundamentals . “The recovery is gradually strengthening. The current account deficit is modest. Inflation stabilizes. The financial sector is well capitalized and solid. The external debt/GDP ratio is falling. Foreign exchange reserves are adequate,” Das told the Bank of Baroda economic conference. He underscored the bleak global picture given inflationary pressures, tight external financing situation and financial stability issues in many countries. In the meantime, the Governor has acknowledged the fact that there is a genuine shortfall of currency supply in the market relative to demand due to import and debt service requirements and portfolio outflows. . He said the apex bank provides US dollars to the market to ensure there is adequate foreign exchange liquidity. Additionally, Das said a considerable portion of the outstanding external commercial borrowing (ECB) is hedged. For India, according to RBI internal research estimates, the optimal coverage ratio is 63%. “Given the natural hedges and public sector corporate exposure, the optimal hedge ratio condition is comfortably met in the case of the ECB stock in India’s external debt,” he said. he adds. Following RBI’s actions, the rupiah’s movements have been relatively smooth and orderly, according to Das. “We will continue to engage in the FX market and ensure that the Rupee regains its level in line with its fundamentals. I would like to reiterate that we do not have any 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.

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