RBI Pushes Back on IMF Remarks

The Reserve Bank of India pushed back against the IMF’s observations on India’s statistical systems and its foreign-exchange regime, with Deputy Governor Poonam Gupta stating that the Fund’s comments were narrowly focused and did not cast doubt on the integrity of India’s economic data. 

Her remarks at a press conference today sought to clarify the context of the “C” rating on national accounts statistics as well as the IMF’s recent reclassification of the rupee’s exchange-rate arrangement.

Gupta said the IMF’s taxonomy evaluates whether the data supplied for surveillance contain any gaps that impede its assessments, and is not a judgment on the quality or sanctity of India’s GDP numbers.

Most of India’s key datasets, including inflation, industrial production, and fiscal indicators, had been graded A or B by the IMF, she noted.

The only element flagged was the national accounts base year, which the Fund considers outdated. Gupta said the forthcoming revision should address this concern and align India’s statistical architecture more closely with international expectations.

On the exchange-rate framework, Gupta emphasised that India continues to operate a standard managed float, a regime used by almost all emerging markets. She said that only a handful of countries maintain fixed pegs, and that free-floating currencies are largely confined to advanced economies.

India’s approach, she said, is consistent with balancing market-driven price discovery and the need to smooth episodic volatility.

The IMF’s decision to classify India under a “crawl-like” subcategory was based solely on the rupee’s behaviour over the past six months, Gupta said, adding that the label reflected a cross-country comparison of volatility rather than any structural shift in policy.

The RBI’s role, she reiterated, is limited to containing undue fluctuations around what it considers a reasonable level, and the central bank does not target a specific exchange rate.

Her clarification appears intended to dispel any impression that the IMF’s commentary signals deeper concerns about data integrity or a departure from India’s long-standing exchange-rate philosophy.

With a national-accounts revision underway, and with the RBI maintaining that India’s FX framework remains unchanged, policymakers seem focused on ensuring that external assessments do not mischaracterise the country’s statistical or currency-management practices