RBI intervenes in forex markets to smooth volatility: Subbarao

The Reserve Bank of India lets the exchange rate be market determined but intervenes to smooth volatility and prevent disruptions to macro-economic stability, Reserve Bank of India Governor Duvvuri Subbarao said in a speech in London on Wednesday.

"We let our exchange rate be largely market determined, but intervene in the market to smooth excess volatility and/or to prevent disruptions to macroeconomic stability," Subbarao said, according to a copy of the speech posted on the RBI web site on Thursday.

Subbarao also said credible fiscal consolidation is a pre-condition for stabilising inflation and in securing non-inflationary growth.

Image: D Subbarao