As stated in the preamble to the Foreign Exchange Management Act, 1999, the Reserve Bank is committed to maintaining orderliness in the foreign exchange market and in fulfilment of this responsibility, RBI has intervened in the foreign exchange market, whenever necessary, only to curb excessive volatility and restore orderly conditions.
Over the years, the Reserve Bank has made available a wide range of hedging tools to enable firms to manage foreign exchange risk. It is heartening to note that diverse market participants, firms and individuals are actively managing their foreign exchange risk and have become accustomed to dealing with exchange rate volatility effectively.