"The currency rate is set by market forces and our job, mainly RBI's job, is that it finds its level in a stable order," he told PTI in an interview.
He was replying to a query on whether the government or the Reserve Bank is targeting a level for rupee, which is currently trading at over 66 to a dollar.
The rupee has depreciated about 8 per cent so far this fiscal. The devaluation of Chinese yuan last month has created turmoil in the financial markets worldwide which saw huge depreciation in the Indian currency.
"The G20 meeting the Finance Ministers clearly issued a policy statement saying we don't want to get into a policy environment where there is competitive devaluation.
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A weak rupee increases India's import bill. But with low commodity and oil prices, the depreciation in the rupee would have a limited impact on the current account deficit.
"We reiterate our commitment to move toward more market-determined exchange rate systems and exchange rate flexibility to reflect underlying fundamentals, and avoid persistent exchange rate misalignments.
"We will refrain from competitive devaluations, and resist all forms of protectionism," said the communique issued at the end of the two-day meeting of the G20 Finance Ministers and Central Bank Governors.
The statement comes against the backdrop of unsettling currency devaluation done by China recently that sent markets globally into a tailspin.