Former Reserve Bank of India governor Raghuram Rajan.
\n\nFormer Reserve Bank of India (RBI) Governor Raghuram Rajan has cautioned against defending the rupee at a specific exchange-rate level, saying India should not “fixate on a number” or exhaust its foreign exchange reserves to support the currency.
\n\nIndia should not "fixate on a number" for its currency level or run down foreign exchange reserves to defend the rupee, Raghuram Rajan, former Reserve Bank of India governor, said in an interview with Reuters.
\n\n"I think the first response would be, don't panic," Rajan told the Reuters Global Markets Forum, warning that there was scope for the current account deficit to widen further if oil prices stayed elevated.
\n\n"I would take a very sensible view and look at the longer term, and examine whether this (situation) is an outlier relative to past episodes," said Rajan.
\n\n"Some currency depreciation is not necessarily a bad thing in this kind of environment. It allows you to stabilise your exports (and) makes your goods more competitive."
\n\n"We just spent a lot of money trying to get the FCNR(B) money in. It would be a shame if that was quickly spent in defending a level, which historically we…
Original source: https://www.timesnownews.com/business-economy
