INSUBCONTINENT EXCLUSIVE:
policy nudges, Reserve Bank of India (RBI) Deputy Governor BP Kanungo said.In his speech at the Forex Association of India Conference in
Singapore, the copy of which was uploaded on the RBI website on Monday, Mr Kanungo also noted that although the global economic scenario is
growth projections for 2019, although the outlook for 2020 is more positive
According to the multilateral agency, while growth in developed countries remains sluggish, the emerging economies, including China and
India, appear to be facing a challenge."The policy regime is also oriented to providing adequate instruments of hedging to all resident
are fairly deep and liquid but needs further strengthening
There is a wide menu of hedging instruments available and further expansion would be in keeping with understanding of their risk
implication," Mr Kanungo said."In recent times, global institutions and investors have shown a healthy appetite for Rupee denominated
assets, which while ensuring flow of foreign exchange protects the Indian issuers from exchange risk
volatility."The Reserve Bank is mandated to maintain orderly conditions in the foreign exchange market
Its intervention in the forex market is solely directed at curbing sudden turbulences not backed by the economic fundamentals
As has been said repeatedly, market operations are not intended to achieve any target exchange rate or band of rates," he said.He pointed
out that the exchange rate dynamics in India for more than a decade has been driven by capital flows rather than current account
balances."Though long-term flows related to FDI (foreign direct investment) and long-term debt have been fairly stable keeping in tandem
with the economic fundamentals, the portfolio flows have their own flows have their own dynamics depending as much on attractiveness of
circumstances leave no option other than market intervention to restore orderliness in the market."He noted that the Indian forex markets
have been fairly stable in recent months.According to the deputy governor, global trade tensions between the two largest economies -- US and
tension, nor does it seem to escalate and get out of hand rapidly in the near future
Whatever may be the rational and economic logic behind the competitive protectionism through tariff barriers, it is certainly contributing
to the global economic slowdown," he added.Get Breaking news, live coverage, and Latest News from India and around the world on
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