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