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  1. RBI Governor Raghuram Rajan expresseses concern about ‘excessively strong rupee’

RBI Governor Raghuram Rajan expresseses concern about ‘excessively strong rupee’

Indian Rupee has surged nearly 2 per cent this year, much more than compared to various Asian currencies.

By: | Mumbai | Published: March 4, 2015 5:22 PM
Indian Rupee, US dollar, Rupee to dollar, Rupee vs dollar

Indian Rupee has surged nearly 2 per cent this year, much more than compared to various Asian currencies.

RBI Governor Raghuram Rajan today said that the “excessively strong rupee” is undesirable as it triggers disinflationary pressures.

“The rupee has remained strong relative to peer countries. While an excessively strong rupee is undesirable, it too creates disinflationary impulses,” Rajan said in a statement announcing cut in interest rate cut.

“It bears repeating here that the Reserve Bank does not target a level for the exchange rate, nor does it have an overall target for foreign exchange reserves. It does intervene on occasion, in both directions, to reduce avoidable volatility in the exchange rate,” he said.

“Any reserve build-up is a residual consequence of such actions rather than a direct objective,” he added.

Rupee has surged nearly 2 per cent this year, much more than compared to various Asian currencies.

RBI has been intervening in the market at certain occasions to prevent the rupee from strengthening.

Continuing its slide for the third straight session, the rupee yesterday fell by 5 paise to end at 61.92 against the dollar following sustained demand for the American currency from importers and a better dollar in overseas trades.

India’s foreign exchange reserves rose to USD 328.7 billion at the end of January 2015. Thus, it provides an “opportune time” to remove restrictions on gold imports.

The Economic Survey for 2014-15 said financial inflows in excess of the requirements have helped shore up foreign exchange reserves (USD 328.7 billion at the end of January 2015). They have helped lessen the vulnerability concern that led to serious stress last year.

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  1. S
    Sadasivan
    Mar 4, 2015 at 6:23 pm
    First it was the CEA of PMO.[an IMF-puppet].Now thre other IMF-puppet comes out with rubbishdia's Rupee is very weak,It was 44 to the US Dollar before the mive stimuli and weakened to the 60s,despite HUGE QEs by the US federal reservedians have become very poor. Now the ground work is being laid for,with such nonsense:- 1.Huge National Debt 2.Cancel this with QEs.that is steal from the citizens 3.Keep low interest rates.Already started.Again this is stealing from the citizens 4.Continue this till the Huge debt is excelled by THEFT from the Citizens... India is in danger from such IMF-puppets. The Rupee is very weak and has to be strengthened.Not transfer of wealth from the commonman to the rich,increasing the already HIGH rich-poor gap. Such people ,appointed by another IMF-puppet,who make Indians poorer by the minute have no place in India's activities and functions.
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