The Indian rupee climbed to its strongest level in more than a month on Wednesday, October 14, extending gains amid a series of Reserve Bank of India (RBI) measures to curb forex speculation and after Governor Sanjay Malhotra told Moneycontrol that further steps remained an option to ensure orderly currency movements.
In an exclusive interview with Moneycontrol, Malhotra said the central bank was prepared to take additional measures, if necessary, to curb speculative activity in the foreign exchange market.
The domestic currency rose 0.4 percent to 94.9125 against the US dollar, emerging as Asia's best-performing currency for the day. The rupee has gained around 2 percent this week, recovering from last week's lows amid the central bank's efforts to ease pressure on the currency.
Malhotra said the RBI had a wide range of tools available and would not hesitate to act if speculation persisted. He also clarified that the recent forex restrictions were not capital control measures and would not prevent foreign investors from bringing funds into India or repatriating their investments.
The RBI has introduced several measures since October 10, including directing oil marketing companies to meet their dollar requirements through a special facility, tightening compliance requirements for currency hedges and imposing cash reserve requirements on certain forex derivative transactions.