India RBI chief: markets can be irrational, rupee may be undervalued
Sanjay Malhotra also said the central bank would ensure the rupee stabilised and moved in an orderly manner, as it neared record lows. India's rupee fell to 96.8450 per dollar on Wednesday, nearing its record low of 96.96 hit in May.
(Adds additional comments by RBI chief in paragraphs 5-8. Also changes story identifier) MUMBAI, Oct 7 (Reuters) — India's central bank governor Sanjay Malhotra said on Wednesday financial markets could be irrational in the short term and several measures suggested the rupee was undervalued. Speaking at a post-policy press conference, Malhotra was responding to a question on why currency forecasts and hedging behaviour continued to point to further rupee weakness despite India's ability to attract foreign inflows.
"Its only in the long run they are able to find the right value," Malhotra said, adding that "by a number of estimates, including the REER (real effective exchange rate), rupee... " Malhotra later said the RBI would ensure the rupee stabilised, found its correct value and moved in an orderly manner. 96 hit in May. S.
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