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2025-10-29 16:55:31
[The Triple Pressures Behind the Reserve Bank of India's Tough Stance] ⑴ Reserve Bank of India Deputy Governor Poonam Gupta stated clearly in Mumbai on Wednesday that under a market-driven exchange rate mechanism, the rupee is not a policy tool to counter trade tariffs. ⑵ This statement comes at a time of continued pressure on the rupee, primarily influenced by market concerns about potential high tariffs imposed by the US on Indian exports. ⑶ The Indian rupee was last quoted at 88.2250 against the US dollar, having depreciated by 3% year-to-date. ⑷ The Reserve Bank of India's emphasis on the market-based nature of the exchange rate mechanism indicates that it will not manipulate the exchange rate to address trade disputes. ⑸ Market anxieties and rupee depreciation pressure have created a vicious cycle, with the current exchange rate approaching a key psychological level. ⑹ The public statement by a central bank official at this sensitive time underscores policymakers' determination to maintain exchange rate stability.
