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Reserve Bank of India Governor Shaktikanta Das said the rupee has held its own in extremely volatile global financial markets, which has seen sharp depreciation of most major currencies against the dollar.
"Since the Jackson Hole summit last week, markets have become extremely volatile and uncertain," said the Governor.
Mr Das said that India's forex reserves at $561 billion provide a "cushion" for "daily" shocks which helps the central bank step in and shore up the rupee from extreme volatility, noting the rupee had moved in an orderly manner at a time of sharp depreciations in other currencies.
RBI's policy is to prevent excessive volatility of the rupee, or the exchange rate and also anchor expectations around the currency's depreciation, Mr Das said.
"Going forward, our monetary policy will be watchful, nimble-footed and calibrated," said the Governor. He said that the health of our banking system is sound and can prevent any negative spillovers from external headwinds.
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