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Mumbai: Reserve Bank of India (RBI) Governor Sanjay Malhotra on Saturday emphasized that the value of the rupee against the US dollar is determined by market forces and that the central bank does not intervene in day-to-day currency fluctuations.
Speaking to the media after Finance Minister Nirmala Sitharaman’s meeting with the RBI board, Malhotra stated that the RBI focuses on the rupee’s medium to long-term value rather than short-term fluctuations.
Impact of Rupee Depreciation on Inflation
Addressing concerns about the rupee’s depreciation against the US dollar, Malhotra noted that a 5% depreciation in the currency leads to an increase in domestic inflation by approximately 30-35 basis points (bps).
He further assured that the RBI has factored in the current rupee-dollar exchange rate while preparing growth and inflation projections for the next financial year.
New Income Tax Proposal to Be Introduced in Lok Sabha
Responding to a query, Finance Minister Nirmala Sitharaman confirmed that the Union Cabinet has approved the new income tax proposal. She expressed hope that it would be introduced in the Lok Sabha in the coming week.
Following its introduction in Parliament, the proposal will be sent to a parliamentary standing committee for further review and discussion.
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