India’s central bank governor Sanjay Malhotra said the bank’s net short US dollar forward position remains at a “very manageable” level, and he also referred to prior liquidity swap arrangements and recent measures to improve the balance of international payments.

　　Over the past two years, to support the continuously weakening rupee, the Reserve Bank of India has built one of the largest global net short US dollar positions. The central bank now faces the challenge of how to unwind these positions without disrupting foreign-exchange market stability.

　　“Exchange rates are still determined by the market,” Malhotra said in an interview on Thursday. “Our intervention policy remains unchanged, namely to curb excessive volatility and any improper speculative activity.”

According to reports, the Reserve Bank of India expects that its recent three measures—attracting more US dollar inflows into the country through foreign-currency non-resident (bank) deposits, external commercial borrowings, and overseas foreign-currency borrowings—will bring at least $80 billion in capital inflows.