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From the platform of Delhi School of Economics, RBI Governor Sanjay Malhotra clearly said that no target level is set for the rupee and the recent fall is only due to the increasing demand for dollars. He assured that India has adequate forex reserves and there is no need to worry about external risks. In this program, he gave the message of work, hard work and honesty to the students and said that they should focus on work and not on results.
In the VKRV Rao Memorial Lecture of Delhi School of Economics, RBI Governor Sanjay Malhotra gave a clear answer on the recent fall in the rupee. He said that the central bank does not target any particular level and the rupee naturally weakens when the demand for the dollar increases. He also assured that India’s forex reserve is very strong and there is no concern about the country’s external sector. Actually, it was being said that the Reserve Bank keeps the value of rupee fixed at a fixed number. Like the rupee should be stopped at 85 or not allowed to go above 90. He put an end to these speculations and said that RBI does not make any such fix.
Sanjay Malhotra said that the recent devaluation of the rupee is not a part of any target based policy but is entirely a demand related behaviour. If the demand for dollars increases in the market, the rupee depreciates and when the demand for rupee increases, the domestic currency strengthens. He said that progress towards a better trade agreement between India and America will gradually reduce the pressure on the current account. He also said that after the US Federal Reserve indicated that it would not cut rates in December, the dollar index has crossed 100, due to which, like the currencies of the entire world, pressure was seen on the rupee too. On Thursday, the rupee weakened by 23 paise and closed at 88.71 per dollar.
Forex reserves and financial stability
The Governor said that India has very good reserves of foreign exchange and there is no need to worry on the external front. He clarified that the top priority of RBI is to maintain financial stability and accordingly the central bank is simplifying the regulations and strengthening necessary safeguards.
Indian banks can soon reach global top 100
Responding to a question on the banking sector, Malhotra said that at the pace at which Indian banks are performing, in the coming time some of them may be included in the top 100 lenders globally. He said that the balance sheet of Indian banks is strong and credit growth remains good.
Mantra of Karma to students
While interacting with the students, Malhotra said that one should not predict one’s career. He said that instead of focusing on results, it is better to do the work with complete honesty and passion. He reiterated that as Steve Jobs said, the dots only connect when you look back. Moving forward, one should focus only on action.
He told that this is the second time when he has advised the students to focus on their work. Earlier, at IIT Kanpur also, he had said the same thing that one should never stop learning and should keep questioning the status quo because actions determine the results to a great extent.
Malhotra’s background
Sanjay Malhotra is a graduate in Computer Science and Engineering from the Indian Institute of Technology Kanpur and has a master’s degree in Public Policy from Princeton University, USA. Malhotra, a 1990 batch IAS officer of Rajasthan cadre, took charge as the 26th Governor of the Reserve Bank of India on December 11, 2024. Before this he was the Secretary of the Revenue Department in the Finance Ministry.
