The RBI forex market stability plan remains strong. RBI Governor Sanjay Malhotra said the central bank will take all needed steps to keep the currency market stable. He said the RBI wants to stop sharp swings in the rupee value.
The Indian rupee has fallen nearly 6% against the US dollar in recent weeks. Rising tensions in West Asia increased pressure on global currencies. The RBI Governor said the rupee may now be undervalued.
Sanjay Malhotra said the RBI does not target a fixed exchange rate. However, the central bank will act if traders create heavy volatility in the forex market.
He also said India has strong foreign exchange reserves. The RBI can use several tools to manage sudden market changes. He added that the rupee may improve after global tensions ease.
The RBI continues to focus on inflation control and economic growth.
