MUMBAI (Reuters) - The Reserve Bank of India will not have any "hesitation" in using foreign exchange reserves to reduce currency volatility, governor Raghuram Rajan said on Monday, while also noting India was in a better position relative to other countries.
Rajan added India's macro-economic problems were "under control" although he added the country would need to focus on increasing domestic production as an effective way to protect itself against a global economic slowdown.
The rupee slumped to as low as 66.49 per dollar on Monday, its lowest since September 2013, as Asian markets reeled under fears of a China-led global economic slowdown.
Rajan also said the central bank's priority remained to help economic growth by bringing down inflation along a "glide path" that aims to keep consumer prices growing an annualised rate of between 2 and 6 percent.
India's annual consumer price inflation slowed down to 3.78 percent in July, its lowest level on record.
(Reporting by Suvashree Dey Choudhury; Writing by Himank Sharma; Editing by Rafael Nam)