“Our endeavor is to ensure there is orderly evolution of rupee in both ways,” says RBI governor

The Reserve Bank of India (RBI) governor, Shaktikanta Das on Tuesday said that the RBI is for an orderly appreciation or depreciation in the currency and is intervening in all market segments to restrain volatility.

“We don’t have a level in mind, but our endeavor is to ensure there is orderly evolution of rupee in both ways,” said Das in a fireside chat at the Singapore Indian Chamber of Commerce and Industry’s event in the city-state.

In 2022, the Indian rupee has been descending by 6.6%, as fears of a global recession and worsening external balances fuel outflows.

Earlier this month, RBI declared measures to help in upping its foreign exchange reserves which has declined to the lowest in more than 14 months at $588.3 billion as of 1 July.

“As a central bank, we don’t like excessive volatility. Our dealing room guys decide the strategy on a minute-to-minute basis,” said the RBI governor.

He also said that the deficit in India’s current account– the broadest measure of trade– will stay manageable at below 2.5% of GDP and should average at $105 a barrel.

“India has seen nearly $30 billion of outflows from equities this year, prompting Das to say that whatever outflows that had to happen already happened. On the RBI’s plan to settle overseas trade in the local currency, Das said it will help in the internationalization of the currency,” a source as per the Mint.

On Tuesday, the rupee depreciated by 14 paise to close at a new lifetime low of 79.59 against the US dollar.