The Reserve Bank India (RBI) will intervene in the foreign exchange market when there is an excess volatility, and is not targeting any level for the Rupee, Governor Sanjay Malhotra said while addressing the post monetary policy press conference on April 9.
“Any excessive volatility, if it requires an intervention, we will certainly intervene wherever it is required,” Malhotra said. He added that the central bank is not targeting any levels for the rupee and will let the market decide it, based on trades.
“We do not target any level for Rupee. Markets in India are quite deep quite wide, and the market forces best know what the levels should be,” governor said.
RBI’s monetary policy report on said the Indian rupee (INR) has faced downside pressure primarily because of US dollar appreciation. Moreover, persistent FPI outflows, increasing global economic uncertainty, and widening trade deficit added to the downward pressure on the rupee.
However, the INR has staged a recovery in March 2025, supported by FPI inflows and improved risk sentiments, the monetary policy report said. The INR also experienced heightened volatility, particularly in Q4FY25, mirroring fluctuations in the global foreign exchange market.
Forward premia also exhibited significant fluctuations and remained elevated across all maturities during H2FY25, reflecting tighter liquidity conditions and heightened global uncertainties, the RBI report said.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
