India should let exchange rate move as first line of defence in ongoing shock, IMF official

MUMBAI: India should allow the dollar-rupee exchange rate to move as the first line of defence amid the ongoing oil shock, an IMF official said on Wednesday.

“Our advice to countries is to use the exchange rate as the first line of defence amid ongoing shocks,” Krishna Srinivasan, director of the Asia and Pacific Department at the IMF, said at a media briefing in Mumbai. “We would advise India to let the exchange rate move.” The Reserve Bank of India has intervened heavily to support the rupee via dollar sales from its reserves, a special window to offer dollars to oil companies and reserve requirements for large hedge requirements.