RBI Governor Shaktikanta Das Speech: Speaking at the BOB Annual Banking Conclave 2022, Das said that the rupee is holding up well as compared to its advanced and emerging market peers.
RBI Governor Shaktikanta Das on Friday said that the Indian economy is relatively better placed amid grim situation in the global market. He said that the rupee is holding up well as compared to its advanced and emerging market peers.
Speaking at Bank of Baroda’s (BOB) Annual Banking Conclave 2022, Das said that the central bank has been supplying US dollars to the market to ensure an adequate supply of liquidity and noted that it is necessary to look at unhedged forex exposures factually, instead of being alarmed by it.
“We have zero tolerance for volatile and bumpy movement of rupee; RBI actions have helped in smooth movement of rupee,” Das said. He said that high-interest rates in the US along with increased risk aversion have fueled the safe-haven demand for the US Dollar. He said that the RBI continues to remain watchful of headwinds and will take measures as required.
The central bank chief stressed that even strong reserve currencies like the Japanese Yen have weakened. He noted that there’s a genuine shortage of US Dollars due to imports.
Das said that India’s optimal hedge ratio condition is comfortable in respect of ECB and said that the RBI will ensure that the rupee finds its level, its orderly evolution.
On the inflation front, Das said that the current inflation targeting framework has worked very well since its adoption in 2016. He added that the central bank’s decision on interest rate hike and liquidity always takes into consideration the growth objective.
Speaking about the banking sector, Das said that banks need to move along with changing times. He said that banks expected to be the permanent institutions once they obtain a licence from the RBI and responsibility lies with the banks to ensure a robust governance.
Source:indianexpress.com