1 hr ago
RBI Governor Says Rupee May Be Undervalued, Pledges Stability
India’s rupee has been losing ground against the US dollar.
Reserve Bank of India Governor Sanjay Malhotra said some measures suggest the rupee may be undervalued.
He said the central bank will support the rupee as it moves toward what he called its correct value.
The RBI also wants the currency to move in an orderly way, without big sudden swings.
Malhotra said markets can behave irrationally in the short term but show the right value over a longer period.
He spoke on Wednesday as the rupee neared its intraday record low of 96.96 per dollar.
The rupee has been under pressure this year, especially since the West Asia conflict began in late February.
Higher crude oil prices have added to the challenge for India, which imports oil.
Reserve Bank of India Governor Sanjay Malhotra said estimates, including the REER, suggest the rupee may be undervalued.
Malhotra said the RBI would support an orderly move toward the rupee’s correct value and limit excessive volatility.
His comments came Wednesday as the rupee edged toward its intraday record low of 96.96 per US dollar.
Malhotra said markets can be irrational in the short term but reflect their right value in the long run.
The rupee has faced pressure this year, particularly amid the West Asia conflict and rising crude oil prices.
- Who
- Reserve Bank of India Governor Sanjay Malhotra
- What
- He said the rupee may be undervalued and that the RBI would support an orderly move toward its correct value while limiting excessive volatility.
- Where
- At the Reserve Bank of India headquarters in Mumbai.
- When
- Wednesday; the rupee has been under pressure for much of this year.
- Why
- The rupee has faced pressure, particularly amid the West Asia conflict and rising crude oil prices.
Central bank support
Market uncertainty
Currency value and stability
Central bank support
Malhotra said the rupee may be undervalued and the RBI will support an orderly move toward its correct value while limiting excessive volatility.
Market uncertainty
Malhotra also said markets can be irrational in the short term, even though they reflect their right value in the long run.
Key facts
- Speaker
- Sanjay Malhotra, Governor of the Reserve Bank of India
- Currency
- Indian rupee
- Assessment
- Malhotra said several estimates, including the Real Effective Exchange Rate, suggest the rupee may be undervalued.
- RBI approach
- Support an orderly movement toward the rupee’s correct value and avoid excessive volatility.
- Intraday low cited
- 96.96 rupees per US dollar
- Pressure factors
- The West Asia conflict and higher crude oil prices
Quotes
Sanjay Malhotra
Governor of the Reserve Bank of India
“We will ensure that the rupee stabilises, that the rupee finds its correct value, and we will support an orderly movement of the rupee in finding its correct value and at the same time in ensuring that there is no excessive volatility.”
freepressjournal.in
livemint.com
“By a number of estimates, including the REER (Real Effective Exchange Rate), the rupee is not overvalued; it may be undervalued.”
freepressjournal.in
livemint.com
Sources
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