According to the governor of the Reserve Bank of India, the American practice of placing emerging market nations on a watchlist as suspected currency manipulators should be revisited.
He highlighted the need for these nations to support their economy against market fluctuations, according to a Bloomberg report.
“There has to be a two-sided appreciation of the challenges” emerging markets face dealing with spillover effects of advanced economy policies, Reserve Bank of India Governor Shaktikanta Das said. He was speaking on the sidelines of the meetings of the International Monetary Fund and World Bank in Marrakech, Morocco on 12 October.
In late 2020, India was most recently removed from the US Treasury's radar as a possible currency manipulator. Treasury did not designate any significant trading partner as a manipulator in its June update, but seven economies, including China, Germany, and Switzerland, were still under observation.
As it looks to increase reserves to stave off any speculative attacks on the currency, India's Reserve Bank has been among the market's most active dollar buyers recently.
The RBI has accumulated $60 billion in reserves after it fell to a two-year low of $525 billion in October, 2022.
“India, with a huge population, and with the size of our economy, we have to be self-reliant, we have to be self-dependent, we have to have our strong reserves,” Das said.
The central bank governor also spoke about the future of money. He said that the Central Bank Digital Currency “is going to be the future currency of the world and it is necessary that every central bank, every country works on CBDC.” He also added that private cryptocurrencies may lead central banks to lose their stranglehold over monetary policymaking.