RBI will not allow a major fall in the value of the rupee: Michael Patra

New Delhi: Reserve Bank Deputy Governor Michael Patra has expressed confidence that India’s required monetary policy tightening will be more moderate than other countries in the coming days. He also claimed that inflation in India would come under control in the coming months. At the same time, the RBI is trying to ensure that there are no major fluctuations in the Indian currency, Patra said. He said that the Indian rupee was stable compared to the world’s other currencies. Apart from this, Patra also underlined that the government would decide on the rupee-ruble payment system.

The value of the Indian rupee has fallen to 78 rupees against the dollar in the last few days. The value of the currencies of many countries around the world has fallen. There are various reasons behind this. Some are even criticising the fall in the Indian rupee. Against this backdrop, RBI Deputy Governor Patra shed some light on the depreciation of the Indian rupee against the dollar. He was speaking at an event on ‘Geopolitical Spillovers and the Indian Economy’ organised by the PHDCCI.

‘Decisions have been taken in the RBI’s monetary policy against the backdrop of the depreciation of the Indian currency, and we will continue to do so in the future. The RBI does not know the value of the Indian rupee in the near future. At the same time, the US Federal Reserve also does not know at what level the dollar will be,’ Patra said. But the Indian rupee will not fluctuate much. Patra explained that this is because the RBI is working towards stability in the value of the rupee, and continuous steps are being taken in this regard.

The Indian rupee is on the list of currencies in the world whose value has fallen marginally. Patra underlined that this would be noticeable if we look at the fall in the value of the Indian rupee carefully. RBI Deputy Governor Patra highlighted the reason behind this was the strong foreign reserves support in India. India has more than $600 billion in foreign reserves. Patra said it is because of this that the value of the Indian currency has not fallen much.

At present, the central banks of many countries are raising interest rates. The US Federal Reserve, the Bank of England and several other major countries have decided to raise interest rates. The RBI has hiked interest rates by 0.9 per cent in a month and a half. Noting this, Patra said the global economy is facing an inflation crisis.

Necessary steps are being taken in the Indian monetary policy to bring inflation under control. Patra expressed confidence that by the last quarter of the current financial year, the inflation rate in India will be under control and below 6 per cent. ‘The supply chain disruption fuels the current inflation due to the Ukraine conflict. But soon, this inflation will come down. If the

monsoon is good in India, food prices will fall. Therefore, the country will quickly recover from this inflation crisis. Against this backdrop, RBI’s monetary policy will be more balanced than other countries in the coming days,’ RBI Deputy Governor Patra claimed.