"A certain amount of leeway (in rupee movement) this way that way is fine. We are not overly worried about that... Nevertheless a substantial strengthening of the currency to USD 45 and USD 50 levels might impinge on exports especially because some of our competitor emerging markets have depreciated currencies," he told CNBC TV18.
The Governor, who announced the first bi-monthly monetary policy yesterday, said sluggishness in exports in recent months is more to do with a slowdown in industrial economies in the first quarter of this year.
"What we are exporting today is what was contracted three-four months ago. Today's exchange rate has nothing to do with those levels of export," Rajan added.
Exports contracted 3.67 per cent in February to USD 25.68 billion.
The rupee strengthened by 14 paise to touch a fresh eight-month high of 59.77 against the US dollar in early trade at the Interbank Foreign Exchange market.
Rajan further said: "We do not want to reach the level where we think you will have renewed volatility (in exchange rate) because it is too strong. We will take precautionary measures to reduce volatility at that point, but you have to be somewhat agnostic over a range".