The Reserve Bank of India on Friday said the Indian rupee, which touched a 46 month closing high of Rs 44.46/48 against the US dollar, has been "relatively stable" compared to other international currencies.

"Volatility is not easy to define and I always said the broader line between flexibility and volatility is rather waving and shifting. The rupee value has to be seen in the context of demand and supply in the country and the cross currency movements in the world," RBI Governor Y V Reddy told reporters on the sidelines of Rajbhasha awards function in Mumbai.

Stating that international currencies have been volatile in the recent past, Reddy said: "Do not see into one day movements as one has to take a broader view from the policy angle."
 
"The rupee has been relatively stable and even international observers are pointing out that India has a stable forex market," the governor added.

The rupee appreciated by a record 27 paisa in a single day on Friday against the dollar and even touched an intra-day high of 44.42/43.

Referring to the government borrowing programme, he said it would take into account the normal borrowings, market stablisation scheme and liquidity situation. "It will be smooth and comfortable," he added.

There is overhang of liquidity (in the economy), which gives enormous maneuverability to release liquidity when required, he added.

As per the borrowing calendar, the government plans to raise Rs 59,000 crore (Rs 590 billion) from the securities market in the first half of fiscal 2004-05.

The government would also issue securities and treasury bills totalling Rs 35,500 crore (Rs 355 billion) from April 1 to June 30, 2004 under the Market Stabilisation Scheme.

Reddy said if one sees the calendar of last year (FY-04) and first half of FY-05, the magnitude during this period would not impact the liquidity situation.

Referring to the inflation, the RBI governor said it would be below 5-5.5 per cent in the current fiscal.

Cheaper fruits, vegetables and edible oils pushed down inflation further to 4.78 per cent for the week ended March 13 despite costlier milk, skimmed milk powder, bread and buns, and baby food.

The point-to-point wholesale price index inflation fell marginally by 0.13 per cent from the previous week level of 4.91 per cent in line with the government's claim that rise in prices has been contained.

Earlier after presenting the Rajbhasha awards, Reddy said banks should conduct more work in Hindi language and try to reach out further to its customers.

RBI has set up a committee for procedures and performance audit on public service, which would undertake audit on public services and regulatory clearances in the central bank.

The central bank has also asked banks to set up ad-hoc committees on customer services to rationalise instructions on procedures prescribed by it, he pointed out.