This choice has been motivated by more than one factor. This conference is jointly organized by FICCI which pursues the interests of corporates, and IBA which looks after the interests of banks. I have simply inserted the Reserve Bank’s area of interest, “governance”, between corporates and banks so that all our collective interests are covered.
The interest burden on this rupee counterpart of the foreign currencies purchased by the Bank is indeed heavy. To what extent the Bank can keep buying foreign currencies on the market remains a complex policy question should the considered view that the current exchange rate level have to be maintained.