Reserve Bank of India (RBI) Governor Shakti kant Das, discussing the central bank’s ongoing management of exchange rate volatility, said the rupee has been “one of the least volatile currencies” globally, especially since the beginning of 2023. “The rupee has been very stable vis-a-vis the US dollar and the volatility index,” he told CNBC International in an interview.
When asked why the RBI had not allowed more volatility in the rupee, the Governor remarked, “If you allow volatility, whom does it benefit? It does not benefit the economy. So why would we allow volatility?” He further clarified that while fluctuations in exchange rates are natural, excessive volatility would be damaging.
“Our stated policy is to prevent excessive volatility of the rupee,” he noted, adding that maintaining a stable rupee instils confidence in the market, investors, and the broader economy.
