Don’t miss the latest developments in business and finance.

Foreign exchange operations to be guided by objective of ensuring orderly movements in exchange rate of the Rupee: RBI Annual Report

Image
Last Updated : May 30 2024 | 2:51 PM IST

The Indian rupee experienced bouts of volatility stemming from global financial markets due to the monetary policy stance of the US Fed and lingering geopolitical tensions, the Reserve Bank of India stated in its Annual Report 2023-24. While FPI inflows, softening of crude oil prices and easing of current account deficit supported the INR, a strong USD reflecting safe haven demand in the face of geopolitical tensions and expectations of higher interest rates for longer period in the US imposed downward pressure on the INR. The Reserve Bank intervened in the forex market through operations in the onshore/offshore OTC and exchange traded currency derivatives (ETCDs) segments to maintain orderly market conditions and contain excessive volatility in the exchange rate.

The announced inclusion of Indian government bonds in global bond indices is expected to have a salutary impact on the government securities market in terms of enhancing liquidity, price discovery and diversity in participation base, the central bank further noted. Rationalisation of regulations towards promoting the internationalisation of the INR was undertaken to enable the settlement of bilateral trade in local currencies. Going forward, the liquidity operations would continue to be in sync with the stance of the monetary policy, while the foreign exchange operations would be guided by the objective of ensuring orderly movements in the exchange rate of the Rupee, RBI noted.

Powered by Capital Market - Live News

Disclaimer: No Business Standard Journalist was involved in creation of this content

More From This Section

First Published: May 30 2024 | 2:25 PM IST

Next Story