[MUMBAI] Reserve Bank of India governor Raghuram Rajan said on Tuesday the inclusion of the yuan in the International Monetary Fund's (IMF) special drawing rights (SDR) basket could lead to more devaluation of the Chinese currency.
Mr Rajan noted the yuan has risen after authorities initially devalued the currency earlier this year. "And perhaps with the Chinese inclusion in the SDR basket, you may see a little more of that (devaluation)," he said speaking at a press conference after the central bank's monetary policy announcement on Tuesday.
The IMF on Monday admitted the yuan, also known as the renminbi, into to its SDR basket, where it joins the dollar, euro, pound sterling and yen, in a key step for China's integration into the global financial market.
Mr Rajan said India does not intend to "manipulate" the exchange rate for the rupee to achieve macroeconomic objectives. "We've said repeatedly that our intent is to minimise volatility in the exchange rate rather than target a particular level," he added.