Inflation appears to have peaked, current targeting framework working well: RBI Governor

"We have zero tolerance for high volatility and bumpy movements," he said while speaking about rupee.

Reserve Bank of India (RBI) governor on Friday said that while the inflation appears to be peaked, the situation remains volatile and the RBI was constantly reviewing it.

He also added that the central bank`s goal is and will continue to be to ensure a soft landing for the economy.

Speaking at an event organised by Bank of Baroda in Mumbai, he also said that imported inflation is a challenge because India is a key importer of commodities.

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Talking further, Das said that there was no need to be alarmed by unhedged exposures on foreign borrowings. He added that bulk of such exposures are by state-owned companies and the government can pitch-in with help if need be, he added.

Das also mentioned that the inflation targeting framework has worked well since adopting it in 2016 and stressed that the same should continue in the interest of the economy and the financial sector.

Speaking on rupee fall, the RBI Governor said ""We have no particular level of rupee in mind but we would like to ensure orderly evolution".

"We have zero tolerance for high volatility and bumpy movements," he added.

He also spoke about issues with digital lending and said that it will very soon come out with regulations on the issue of digital lending which will take into account the concerns around excesses by some players and also ensure that innovation is not impacted.

Mentioning the concerns around India's forex reserves, he put fourth that the central bank has built its foreign exchange reserves for situations like these, noting that India has a substantial amount of foreign exchange reserves to handle the current crisis and there is no need to panic.

Meanwhile, Das also urged banks to maintain their key ratios like on capital buffers above the mandated levels, pointing out that such a practice will be looked at as a sign of good governance.

Lastly, he said that going ahead, the world of banking is going to be competitive and collaborative.

(With Inputs from PTI and Reuters)

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