News Tech: The Reserve Bank of India (RBI) remains committed to the stability of the rupee and will not allow the currency to devalue sharply against the dollar, the central bank’s deputy governor said on June 24. “We don’t know where the rupee is going and even the Fed doesn’t know where the dollar is going. But rest assured, we will stand up for that stability and we will We will continue to do so while we speak,” Michael Patra said at an event in New Delhi.
Rising oil prices are the main cause of the rupee’s plight as India imports nearly 85% of its fuel needs. Global supply chain problems, exacerbated by the war between Russia and Ukraine, mean that prices for goods and services are likely to remain high. Rupee continues to come under pressure due to constant dollar outflow from Indian stock and bond markets. RBI intervenes in FX market to prevent rupee unidirectional movement. His RBI foreign exchange reserves as of June 10 were $596.46 billion.
“We are in the market. We will not allow the rupee to move chaotically. We are not looking at levels, but we will not allow jerky movements,” Patra said. The rupee devaluation is one of the smallest in the world, he added. The rupee is steadily depreciating against the dollar after aggressive interest rate hikes by the US Federal Reserve. The rupee closed its record low at 78.39 against the dollar on June 22 and is down more than 5% in 2022.