RBI Responds to IMF's Concerns: Exchange Rate Stability Under Scrutiny

The RBI defended its handling of Indian data sets after the IMF raised concerns. Governor Sanjay Malhotra acknowledged data accuracy and suggested improvements, while Deputy Governor Poonam Gupta addressed 'dated bases' for national accounts and explained India's managed float strategy in exchange rate categorization.

In the wake of concerns raised by the International Monetary Fund (IMF), the Reserve Bank of India (RBI) has stood its ground, defending the country's data management practices and downplaying certain critiques. The IMF recently voiced worries about Indian data sets and exchange rate management.

Governor Sanjay Malhotra emphasized the accuracy of GDP and inflation estimates provided by the Indian government but conceded there might be room for refinement. Deputy Governor Poonam Gupta noted that India's classifications in data aspects typically range between A and B but drop to a C in national accounts due to base year issues.

Gupta clarified that the quality of data is not in question; rather, it's the perception of outdated bases. On exchange rates, Gupta explained India's position as a 'managed float', a category shared by most emerging markets, and reassured that current volatilities align with expectations.

(With inputs from agencies.)