The rupee ended on a firm note at 81.35, 51 paise stronger than Thursday’s close of 81.86. There were reports that the central bank would be providing a separate line to the oil companies in order to reduce their dependence on the forex market for dollars.
In his address, Das said that while the dollar had gained 14.5% against a basket of major currencies, the movement of the rupee has been orderly compared to most other countries and the rupee had depreciated by only 7.4% versus the dollar.
Meanwhile, the country’s foreign exchange reserves fell by $8 billion to $537 billion during the week ended September 23. The decline was largely on account of the fall in value of foreign currency assets, which dropped by $7.7 billion.
The governor pointed out that forex reserves have not depleted as much as they appear to. “About 67% of the decline in reserves during the current financial year is due to valuation changes arising from an appreciating US dollar and higher US bond yields. Incidentally, there was an accretion of $4.6 billion to the foreign exchange reserves on balance of payments (BOP) basis during Q1 of 2022-23,” said Das.
“There have been divergent views on the exchange rate of the rupee and the adequacy of our forex reserves. Let me set out the overall position once again. First, the rupee is a freely floating currency and its exchange rate is market-determined. Second, the RBI does not have any fixed exchange rate in mind,” said the RBI governor.
Das added that the central bank intervenes in the market to curb excessive volatility and anchor expectations.