Subbarao says rupee should be left to market fundamentals
In short
D. Subbarao said the rupee should be allowed to move with economic fundamentals. The report says the rupee recently recovered after RBI steps to cut dollar demand.
He also said short-term fixes are costly and do not solve the deeper causes of capital outflows. It is not clear what policy move, if any, will come next.
What the reporting says
D. Subbarao said the rupee should be allowed to find its level based on economic fundamentals, according to the report. He argued that costly short-term fixes do not solve the structural causes of capital outflows, while the rupee’s recent recovery followed RBI steps to reduce dollar demand. The immediate implication is policy debate over currency management, but the source does not say what new action will follow.
Why it matters
D. Subbarao, the RBI’s former governor, said the rupee should be left to settle at a level driven by fundamentals. The source says he criticized short-term interventions as costly and pointed to tax reforms as a way to attract foreign investment. It also says the rupee’s recent recovery followed RBI measures to reduce dollar demand, but it does not specify any new policy decision.