Rupee declines as Subbarao says RBI not protecting any level

The rupee moved into a narrow band till afternoon but lost its value by more than 20 paise after Reserve Bank of India (RBI) governor D. Subbarao said in Chennai that the central bank is not looking to protect any particular level of exchange rate but will iron out volatility.

The partially convertible rupee fell to 60.38 per dollar at 1.55pm, the lowest in the day, and was trading at 60.26 at 3.30pm. In morning trade, it had risen to 59.9175 a dollar after opening at 60.
RBI doesn’t have “an exchange rate target or band” but it will intervene only to “curb volatility”, Subbarao told reporters in Chennai after the central bank’s board meeting.
He also said RBI is concerned about India’s current account deficit. The trade gap narrowed sharply to 3.6% of the gross domestic product in the March quarter from its record 6.7% in the three months ended December.
The rupee hit a record low of 60.73 to a dollar on 26 June.