RBI will ensure stability in rupee, help find its correct value: RBI Governor Sanjay Malhotra

Reserve Bank of India RBI Governor Sanjay Malhotra on Wednesday said that the regulator will ensure the rupee stabilises and will support it in reaching its correct value according to news agency PTIHis remarks come amid the currency declining well below the psychological benchmark of 96 against the US dollar in the recent days and inching towards its alltime low of 9696 against the dollar during intraday trading on WednesdayHe pointed out that while markets can be irrational in the short term they reflect their right value in the long runWe will ensure that the rupee stabilises that the rupee finds its correct value and we will support an orderly movement of the rupee in finding its correct value and at the same time in ensuring that there is no excessive volatility the Governor told reporters at the central bank headquarters hereThe rupee has been under pressure since the beginning of the West Asia conflict in late February The elevated crude oil prices pose a challenge to an oilimporting country like India India is the third largest importer and consumer of crude oilBy a number of estimates including the REER Real Effective Exchange Rate the rupee is not overvalued it may be undervalued Malhotra saidRBI Deputy Governor had said fair case for rupee to stabiliseEarlier RBI Deputy Governor Poonam Gupta had termed the rupees 131 per cent depreciation over the past oneandahalf years as a temporary phenomenon and had said that there is a fair case for the rupee to stabilise and appreciate from here onRBI swap facility windowThe central bank had introduced a concessional FCNR swap facility on June 8 as part of the broader goal including to arrest the decline in rupee but the Indian currency has depreciated in the last few sessionsThe government and RBI to encourage capital inflows to boost Indias balance of payments during global uncertainty had launched the swap facility Under this facility banks could mobilise new FCNRB deposits and exchange the dollars with the RBI at a lower concessional rateThe RBI mobilised a record USD 12723 billion through Foreign Currency NonResident Bank or FCNRB deposits as of August 31 Including overseas foreigncurrency borrowings OFCB worth USD 53 billion and external commercial borrowings ECB of USD 39 billion the total inflows under the measures reached USD 136377 billionWhat is FCNR BForeign Currency NonResident Bank or FCNR B deposits is a fixedterm deposit account that allows nonresident Indians NRIs persons of Indian origin or overseas citizens of India to maintain a fixed deposit in specified foreign currencies The RBI permits these deposits to encourage foreign currency inflows that helps to safeguard the rupee against depreciation and to strengthen Indias foreign exchange reservesWith inputs from PTI