RBI not to intervene in foreign exchange market: Gokarn

**Mumbai:**The Reserve Bank of India today said it does notintend to interfere with the exchange rate and its monetarypolicy stance in the coming months would be determined bymovement in inflation.

“In exchange rate policy, Rupee is a floating currency.It remains that exchange rate is market determined and thereis no intent to intervene with a particular exchange rate inmind,” RBI Deputy Governor Subir Gokarn said here.

[caption id=“attachment_126391” align=“alignleft” width=“380” caption=“Gokaran said the Rupee, which is a partially convertiblecurrency, has depreciated because of global conditions.Reuters”]  [/caption]

Gokaran said the Rupee, which is a partially convertiblecurrency, has depreciated because of global conditions."…capital reallocation around the world has impactedmany currencies, and we have stayed with our policy," he said.

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The Rupee has depreciated against the US dollar by about 9percent this year.

The Rupee today weakened by 37 paise to trade at Rs 49.48against the dollar as the US currency strengthened in theoverseas markets.

On the possibility of halting the policy rate hike in itsnext policy review due on 16 December, he said it would dependupon inflation rate.“We gave the guidance two weeks ago (in mid-year monetarypolicy)… Unless there is something dramatic that happens tochange it, that guidance remains. So let us say, the guidanceremains the same until further notice at this stage,” Gokarn

said.

RBI had since March 2010 raised key rates 13 times with aview to calm down the inflation which was still hovering nearthe double-digit mark.The Deputy Governor further said that RBI’s projection oninflation has to take into account international crude oilprices.

Since the time deregulation of petrol prices, “we assumethat the pass through will be more or less full. The newelement in this calculation (on inflation projection) isexchange rate movement”.

On the rate of price rise, he said the structural driversof inflation are still strong and the RBI expects it to remainhigh through October and November.Headline inflation stood at 9.72 percent in September.The government is yet to announce the inflation data forOctober.

PTI