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RUPEE STABILITY: ROLE OF THE INDIAN CENTRAL BANK

Paper Number :WP39/2024
Publication Date :April 12, 2024


The Indian rupee has maintained a stable movement in the recent past. On 19th December, 2023, IMF in the annual Article IV country report for India noted that from December 2022 to October 2023, the rupee-dollar rate “moved within a very narrow range” (The Indian Express, Dec 22, 2023). In response RBI iterated that the view was ‘incorrect’ and the evaluation "unjustified" (Wion, Dec 20, 2023). The RBI has, till date, consistently stated that it uses intervention to curb ‘excessive’ volatility but not to guide the value of the currency. In this context, we look at the central bank’s intervention policies in the recent past to understand the impact of intervention on the rupee movement.