“I am sure there are measures the central bank would take further to make sure that the rupee does not become too volatile,” she said at the Bloomberg New Economy Forum in New Delhi.
The rupee has hit a low, and the RBI is making significant efforts through regulatory measures to keep it stable, she said, adding that the top bank is “not trying to fix the rupee but to curb volatility.”
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She said the rupee’s depreciation over the past year has been significant, with most of the decline driven by global challenges.
Meanwhile, discussions around LTCG tax and securities transaction tax are ongoing, with investors also debating whether different asset classes should be treated similarly, the Finance Minister stated.
“India keeps macroeconomic fundamentals strong and investors need not worry about fiscal discipline,” she assured.
Rupee rebound
The rupee’s biggest single-day advance in six months came on Monday after the RBI unveiled a series of measures to curb dollar demand. The central bank reinforced that with direct market intervention, selling dollars to support the currency, according to traders.
The RBI has since taken further steps, widening the scope of a recently introduced cash deposit requirement for foreign-exchange hedges to cover all such transactions, including those used to hedge banks’ own assets and liabilities.
The central bank has further tightened rules for banks offering non-deliverable foreign-exchange derivatives to clients.
Lenders with units in India’s International Financial Services Centre and certain primary dealers, which were allowed to offer non-deliverable rupee derivatives to non-residents for any purpose, can now offer them only for hedging, the RBI said.