India's Central Bank Chief Says Its Net Short Dollar Position Is 'Very Manageable'

Deep News08-20 10:40

Reserve Bank of India Governor Sanjay Malhotra stated that the central bank's net forward short dollar position remains at a "very manageable" level, citing prior liquidity swap arrangements and recent measures to improve the country's balance of payments.

Over the past two years, the RBI has built up one of the world's largest bearish dollar positions to support the persistently weakening rupee. The central bank now faces the challenge of unwinding these positions without disrupting foreign exchange market stability.

"The exchange rate remains market-determined," Malhotra said in an interview on Thursday. "Our intervention policy remains unchanged, which is to curb excessive volatility and any undue speculative activity."

The RBI reportedly expects its three recent initiatives—aimed at attracting more dollar inflows through foreign currency non-resident (bank) deposits, external commercial borrowings, and overseas foreign currency borrowings—to bring in at least $80 billion in capital flows.

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