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RBI changes stance

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Markets can be irrational in short term, rupee may be undervalued: RBI Guv

Malhotra said financial markets can be irrational in the short run and noted that measures including the REER suggest the rupee may be undervalued

RBI Governor Sanjay Malhotra (Photo: Reuters)

Part 6 of 15

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India's central bank head said on Wednesday that financial markets can be irrational ‌in the short run, adding that several measures of currency value suggest the rupee may be undervalued.

"Its only in the long run, they are able to find the ‌right value," RBI chief Sanjay Malhotra said in his post policy press conference.

"By a number of estimates, including the REER (real effective exchange rate), rupee is not overvalued, may be ‌undervalued," he added.

Malhotra was responding to a ‌question on why currency polls and ‌hedging behaviour continued to point to a ‌rupee depreciation bias, despite India's demonstrated ability to attract foreign flows when needed.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)