RBI to lean out of foreign exchange market interference

9 November 2011: Reserve Bank has decided not to interfere with the exchange rate and its monetary policy stance in the coming months which would be determined by movement in inflation. The decision made by RBI as the Rupee has depreciated against the US dollar by about 9 per cent this year. Today too it weakened by 37 paise to trade at Rs 49.48 against the dollar as the US currency strengthened in the overseas markets.

Since March 2010, RBI had raised key rates 13 times with a view to calm down the inflation which was still hovering near the double-digit mark. The rate of price rise is concerned, the structural drivers of inflation are still strong and the bank expects that, it to remain high through October and November. Headline inflation stood at 9.72 per cent in September. The government is yet to announce the inflation data for October.

Source: Economic Times