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'You buy an umbrella to use when it rains': RBI Governor on using forex reserves

Source From: ENT 2022-07-22 08:40:15

Due to the RBI actions, including measures to encourage inflows, the movements of the rupee have been relatively smooth and orderly, RBI Governor Shaktikanta Das said on Friday.

Speaking at a conference, Das said, "By eschewing sudden and volatile shifts, we have ensured that expectations remain anchored and the forex market functions in a stable and liquid manner."

Das said in recognition of the fact that there is a genuine shortfall of supply of forex in the market relative to demand because of import and debt servicing requirements and portfolio outflows, the RBI has been supplying US dollars to the market to ensure that there is adequate forex liquidity.

"After all, this is the very purpose for which we had accumulated reserves when the capital inflows were strong. And, may I add, you buy an umbrella to use when it rains!