India lost two-thirds of its dollar protecting the rupee


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While India’s central bank has promised to play its part in keeping the currency stable, the governor warned that the rupee is a free-floating currency and exchange rates are market-determined. The RBI also added that it would only intervene (and buy or sell dollars) in the event of heightened volatility.

RBI Governor Shaktikanta Das in the monetary policy briefing said the Indian rupee had performed better than many other currencies but cost the central bank more than two-thirds of its war chest.

“The underlying strength of the economy and the buffers built up over the years have kept us in good stead,” Shaktikanta Das said in his monetary policy statement, which included a 50 basis point hike in interest rates. interest.

The rupee depreciated by 7.4% against the US dollar between March 2022 and September 28.

While India’s central bank has promised to play its part in keeping the currency stable, the governor warned that the rupee is a free-floating currency and exchange rates are market-determined. The RBI also added that it would only intervene (and buy or sell dollars) in the event of heightened volatility.

India’s rising imports grew much faster than exports, pushing the country’s current account deficit – the country’s net outflow of foreign currency – to its highest level in 15 quarters.


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