Rupee better than other emerging markets peers: RBI governor Urjit Patel

India's foreign exchange reserves of $400 billion were enough to take care of 10 months of import, says the RBI governor

The Indian rupee has performed better than other emerging markets peers, Reserve Bank of India (RBI) Governor Urjit Patel said, even as the currency crossed 74 against the dollar after the central bank kept the policy rates unchanged. Patel indicated the RBI would let market forces decide an appropriate level for the rupee.

The RBI governor said the rupee had come under pressure because of external factors, but India’s foreign exchange reserves of $400 billion were enough to take care of 10 months of import.

“The depreciation of the rupee, in some aspects, has been moderate in comparison to several emerging markets peers. By September, the rupee had depreciated in nominal effective terms by 5.6 per cent since end-March. In real terms, rupee depreciation has been at 5 per cent,” Patel said.

“India has not been immune to global spillovers of external factors …,” he said, adding the RBI’s response to these unsettled conditions was to ensure that foreign market conditions remained liquid with no undue volatility. 

He said the RBI would not aim to protect “any particular band or target around any particular exchange rate, which is determined by market forces of demand and supply".

India’s foreign exchange reserves peaked at $426 billion in April, but as of September 28, these were at $400.52 billion.