Shaktikanta Das, Governor, Reserve Bank of India noted in a speech that India's exchange rate policy is well-articulated and has remained consistent over the years. India's exchange rate regime is market-determined, and the Reserve Bank does not target a level or band of the exchange rate. The forex interventions are carried out to ensure an orderly movement of the exchange rate and to curb undue volatility, anchor market expectations and ensure overall financial stability. It is important to note that the exchange rate is also a barometer of an economy's inherent strength. If the Indian Rupee (INR) has remained relatively stable despite severe external shocks including the largest and steepest tightening by the Fed in 2022 and 2023, it speaks volumes about the sea change in our macro fundamentals from the Taper Tantrum days.

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