RBI intervenes in FX mkts to smooth volatility: Subbarao

MUMBAI Thu Jul 18, 2013 10:56am IST

Reserve Bank of India (RBI) Governor Duvvuri Subbarao speaks during a business conference in Ahmedabad May 30, 2013. REUTERS/Amit Dave/Files

Reserve Bank of India (RBI) Governor Duvvuri Subbarao speaks during a business conference in Ahmedabad May 30, 2013.

Credit: Reuters/Amit Dave/Files

MUMBAI (Reuters) - The RBI lets the exchange rate be market determined but intervenes to smooth volatility and prevent disruptions to macro-economic stability, Reserve Bank of India Governor Duvvuri Subbarao said in a speech in London on Wednesday.

"We let our exchange rate be largely market determined, but intervene in the market to smooth excess volatility and/or to prevent disruptions to macroeconomic stability," Subbarao said, according to a copy of the speech posted on the RBI web site on Thursday.

Subbarao also said credible fiscal consolidation is a pre-condition for stabilising inflation and in securing non-inflationary growth.

For full speech double click: link.reuters.com/fad79t

(Reporting by Swati Bhat; Editing by Rafael Nam)

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