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With rupee hitting 11-month low against dollar, Reserve Bank of India (RBI) Governor D Subbarao today said it is not targeting any particular exchange rate or any band.
"We do not target an exchange rate. We do not target an exchange rate band. And I believe that our actions or inactions have been consistent with our policy," he told PTI. Spelling out the policy stance, the Governor said RBI intervenes in the foreign exchange market to manage volatility and to prevent disruptions to the macroeconomic situations.
"That has been the policy, (and) that remains the policy," he said. Supported by portfolio capital inflows and various reform measures announced during the period, the rupee remained strong during December 2012 to early-February.
However, the rupee witnessed some weakness during the second week of February to early March. It gained some strength to remain largely range-bound and saw subsequent appreciation during April. Rupee started its downward journey against the dollar in May and hit 11-month low levels.
