“I personally don’t understand its rationale or economic logic,” he said.
“It is the mandate of the central bank to provide stability in the currency, as a result of which central banks buy and sell foreign currency. Our overall reserves have been fairly steady at $500-600 billion. We are not accumulating reserves. We have a steady pattern of reserves that fluctuates, based on market based transactions. The central bank’s activity in the foreign exchange market has been perfectly balanced and completely legitimate and within the accepted monetary policy mandate of the central banks across the world,” Wadhawan told reporters at a virtual briefing.