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Money Jul 4, 2013

Trying to control rupee, aiming no particular exchange rate: Subbarao

Chennai: As rupee fluctuated in the market, Reserve Bank today said it is not targeting any specific exchange rate and will use all instruments to manage the volatility.

"We do not have an exchange rate target ... We try to manage volatility in the currency movement ...," RBI Governor D Subbarao told reporters in Chennai as the rupee traded at 60.28 to a dollar in the afternoon.

RBI Governor D Subbarao. Reuters

RBI Governor D Subbarao. Reuters

"We employ instruments available to us in order to manage volatility," Subbarao said.

The rupee had touched historic low of 60.76 level against the dollar on 26 June due to heavy capital outflows amid fears of early withdrawal of US monetary stimulus.

A high Current Account Deficit (CAD) is also putting pressure on the value of rupee. CAD touched a record high of 4.8 percent of the GDP in the 2012-13 financial year due to high imports, including that of gold.

Both the government and RBI have taken steps to contain gold imports.

Measures have also been taken to enhance FII inflows in addition to easing norms for domestic companies to raise funds from abroad.

Subbarao's comments come after the rupee touched its record low of 60.76 to a dollar on 26 June.

PTI

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