NEW DELHI: Refuting criticism over the Reserve Bank of India’s (RBI) apparent indiscriminate use of the forex reserves to support the falling rupee, governor Shaktikanta Das on Saturday said that the forex reserves are for the purpose of usinFg in “rainy days” and not meant to be kept as a showpiece.
The RBI governor, while speaking at an event in Delhi on Saturday, said: “The reserves are being accumulated for rainy days, and when it rains, I have said it earlier too, you have to pick up your umbrella and use it”. However, the RBI governor reiterated that the country’s forex reserves are at a very comfortable level.
India’s forex reserves were at $530 billion in the week ending on 4 November 2022. The reserves fell by $1 billion during the week. India’s forex reserves cover eight and a half months of imports. The country’s average monthly imports are around $63 billion in the current financial year.
Rupee has come back strongly since it fell to its lowest level of 83.2 a dollar on 20 October 2022. It has gained 3.2% since then against the US dollar and ended at 80.65 on Friday.
On inflation, Das said though the October retail inflation may come below 7%, inflation remains a major challenge for the country’s economy. “Inflation is a matter of concern with which we are now dealing and dealing effectively,” he said.
Retail inflation in September increased to 7.4% from 7% in August on higher food and energy costs. Retail inflation has averaged around 7.2% in the first six months of the current financial year. The governor also exuded confidence that the economy would remain resilient amid all the gloom, globally.