NEW DELHI: RBI Governor Shaktikanta Das said on Wednesday that despite the rupee's recent downward trend, which saw it even cross the 83 level against the US dollar, the Indian currency has behaved orderly and that its trajectory shouldn't be interpreted emotionally.

During his speech at the FICCI Banking Summit in Mumbai, Das predicted that capital flows will pick up again since the US Federal Reserve would not be using rate hikes for a while.

Just hours before the US Fed is expected to convene later in the day to review key rates, the RBI Governor's remarks on the rupee were made. It is expected that the Federal Reserve would raise interest rates to combat the inflationary trend.

Meanwhile, Das stated that the central bank won't immediately share specifics of the talks. The RBI's Monetary Policy Committee (MPC) is due to meet on Thursday to consider its response to the government for failing to keep inflation under its tolerance limit of less than 4%. He asserted that the RBI lacks the jurisdiction to make these information public.
The mandated tolerance range for inflation is 2% to 4%, and the central bank must maintain this range. But the Center must respond because it hasn't done so for the last nine months.

Das defended the RBI's handling of the price increase, claiming that taking action on inflation too soon would have had a negative impact on the economy and the people. The RBI Governor acknowledged that inflation has not been under control, but he also said that by keeping interest rates low and avoiding premature tightening, the central bank prevented a "total collapse of the economy."

Das remarked that before the launch of the Central Bank Digital Currency (CBDC), RBI needs to work out all of the kinks.

He said, the launch of the e-rupee marked a turning point in the country's history of currency and will fundamentally alter how transactions and business are carried out.

The RBI launched testing the digital rupee on Tuesday.

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