MUMBAI — India’s central bank has zero tolerance for volatile and bumpy movements in the rupee and will continue to engage with the foreign exchange market to ensure the rupee finds its level, its chief Shaktikanta Das said on Friday.
The rupee has been hitting a series of record lows in recent weeks and has broken past the psychological 80 per dollar mark earlier this week and prompted heavy dollar selling intervention from the Reserve Bank of India (RBI).
The RBI has no specific level on the rupee in mind and since there is a genuine shortage of dollars in the market, the central bank has been supplying dollars, Das said at a banking conclave in Mumbai organized by the Bank of Baroda.
On Friday, the rupee was last trading at 79.90/91 to a dollar, compared to its Thursday’s close of 79.9450.
Das also said the central bank has built its foreign exchange reserves for a situations like these and has adequate levels of reserves to handle the current crisis.
While talking about the macro-economic fundamentals of the economy, the governor said India remains well placed and all high frequency indicators have been pointing towards a steady revival in the economy.
He said the central bank’s target is and will continue to be to ensure a soft landing for the economy. (Reporting by Nupur Anand and Swati Bhat; Editing by Jacqueline Wong and Rashmi Aich)