Reserve Bank Governor Sanjay Malhotra on Wednesday said the central bank does not target any level or band for the rupee-dollar exchange rate, but intervenes in forex market only when there is excessive volatility.

Talking to reporters after the announcement of the April monetary policy, the Governor said the impact the US tariffs on India, vis-a-vis some of the other countries, including China and even the smaller nations is much less.

“We are better placed than some of the other countries...We have a comparative advantage,” Malhotra said but admitted that the tariffs are a “growth dampener”.

The Governor was replying to a question about RBI’s currency management strategy as China is likely to use Chinese yuan depreciation as a tool to counter US tariffs.

“So far as the currency management is concerned we do not actually intervene in the currency management. It’s only...For excessive or disruptive volatility that we do. So we do not try to manage or target any reach or band or level of the Indian rupee,” Malhotra said. The Governor reiterated that the Reserve Bank does not target any level. “I think the markets in India are quite deep, quite wide, and the market forces must know the best, know what the levels should be,” he said, adding in case of excessive volatility in exchange rate, the RBI will not be “found wanting”. The rupee lost further ground on the fourth straight session, declining sharply by 30 paise to 86.56 against the US dollar in early trade on Wednesday. Foreign institutional investors (FIIs) offloaded equities worth `4,994.24 crore on a net basis on Tuesday, according to exchange data.

Earlier, while announcing the monetary policy, Malhotra said the recent trade tariff related measures have exacerbated uncertainties clouding the economic outlook across regions, posing new headwinds for global growth and inflation.

Amid this turbulence, the US dollar has weakened appreciably, bond yields have softened significantly. equity markets are correcting and crude oil prices have fallen to their lowest in over three years, he said.