By IANS,
Hyderabad : The Reserve Bank of India will manage volatility in the exchange rate but it hopes that the rupee would recover once the European crisis is resolved, the central bank’s Governor D. Subbarao said Tuesday.
“Our policy remains the same which is to manage volatility in exchange rate and to ensure that exchange rate volatility does not impair on macro-economic stability,” he told reporters on the sidelines of a conference here.
“The exchange rate movement that we have seen over the last couple of weeks, particularly in the last 3-4 days is being driven by global dynamics, and clearly to what extent it moves and in which direction will depend on credible resolution of external situation, particularly the sovereign debt problem in Europe,” he said.
“We expect that the reverse adjustment will take place when the European situation resolves itself,” he said on a day when the rupee fell to an all-time low.
The rupee depreciated to Rs.52.73 per US dollar on Tuesday.
Finance Minister Pranab Mukherjee said Tuesday in New Delhi that RBI’s intervention in the forex market will not arrest the slide as foreign institutional investors’ pullout and global reasons were behind the depreciation.