JPMorgan says Patel forex policy makes for a more nimble rupee

Mumbai

THE Reserve Bank of India's currency intervention policy during governor Urjit Patel's term is allowing for greater two-way rupee movement than under his predecessor, according to JPMorgan Chase & Co.

"The RBI under Mr Patel has been more open to rupee strength," Brijen Puri, JPMorgan's head of markets for India, said in an interview. That's a key shift in policy which, under Raghuram Rajan, was focused on keeping the currency in a "reasonably fixed depreciating band", he said.

Mr Patel's strategy is probably guided by the central bank's focus on keeping consumer-price gains under 4 per cent in the medium term. A weaker rupee would risk importing inflation just when surging oil prices are adding to concerns over slowing growth and potentially worsening public finances in Asia's third-largest economy. India imports two-thirds of the cr…