RBI to let rupee find its own level even as it breaches 90

As expected, the Reserve Bank of India (RBI) is unlikely to aggressively defend the rupee against the US dollar (USD) despite the downward pressures and crossing the psychological barrier of 90 again on Friday (December 5).

After the Monetary Policy Committee (MPC) meeting , RBI Governor Sanjay Malhotra made it clear that the policy is to let the rupee find its level and the market determine that level, intervening only to check excess volatility and ensure orderly movement of the currency.

Malhotra clarifies RBI's plans

He denied that the RBI’s plan to carry out a rupee-USD swap to the tune of $5 billion this month — as he had announced in his initial observations on the MPC’s decisions — is to defend the rupee. He said this is to infuse liquidity (availability of cash) in the bankin