“In exchange rate policy, Rupee is a floating currency. It remains that exchange rate is market determined and there is no intent to intervene with a particular exchange rate in mind,” RBI Deputy Governor Subir Gokarn said.
Gokaran said the Rupee, which is a partially convertible currency, has depreciated because of global conditions. “Capital reallocation around the world has impacted many currencies, and we have stayed with our policy,” he said. The rupee has depreciated against the US dollar by about 9 per cent this year.
On possibility of halting policy rate hike in its next policy review due on December 16, he said it would depend upon inflation rate. “Unless there is something dramatic that happens to change it, that guidance remains. So let us say, the guidance remains the same until further notice at this stage,” Gokarn said.
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