Sanjay Malhotra, Reserve Bank of India governor
GS3Economy · S&T · Environment · Security· Monetary policy, RBI & banking· Prelims + Mains·
Why in news
RBI Governor Sanjay Malhotra stated that the bank will consider further measures to curb speculative trading and defend the rupee's value.
Background
The rupee rose 0.8 per cent to 95.01 following the RBI's extension of derivative transaction curbs and a 25 basis point increase in the benchmark repurchase rate. Finance Minister Nirmala Sitharaman confirmed ongoing efforts to curb currency volatility at the Bloomberg New Economy Forum.
Facts for Prelims
- FactRupee value: 95.01 (after 0.8 per cent rise)
- FactBenchmark repurchase rate increase: 25 basis points
- BodyRBI: Responsible for extending derivative transaction curbs and managing the benchmark repurchase rate
For Mains
Q. Discuss the role of the Reserve Bank of India in managing currency volatility and curbing speculative trading to ensure macroeconomic stability.
Dimensions to cover in your answer
- Monetary policy trade-off: Balancing interest rate hikes to stabilize the rupee against potential impacts on domestic liquidity
- Market intervention limits: Balancing RBI's role in stabilizing the currency versus maintaining a market-driven exchange rate regime
Keywords: monetary policy · currency volatility · speculative trading · forex intervention · macroeconomic stability
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