Rajan warns against using forex reserves to defend rupee
In short
Raghuram Rajan warned against using up foreign-exchange reserves to support the rupee. Mint said India has used about half of the more than $140 billion it raised through special measures earlier this year.
The warning matters because it could affect how the government and central bank handle the currency and banking liquidity. What happens next is not stated in the available reporting.
What the reporting says
Raghuram Rajan warned against exhausting forex reserves to support the rupee, according to a Mint Economy summary that cited India’s use of about half of more than $140 billion raised through special measures earlier this year. The reported rationale was to support the currency and absorb surplus banking-system liquidity. The immediate consequence is not stated, and the exact policy response is unclear.
Why it matters
Raghuram Rajan warned against exhausting forex reserves to support the rupee, with Mint saying India has already used about half of more than $140 billion raised through special measures earlier this year. The reported purpose was to back the rupee and absorb surplus banking liquidity. The story does not say what specific new policy, if any, will follow, or how markets will react next.