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Our Bureau

Mumbai , March 25

DR Y.V. Reddy said today that the rupee's sharp rise this week was driven by demand and supply conditions in the market.

He stated that this was not due to any attempt by the central bank move to contain inflation.

During the last four straight trading sessions, the rupee gained 1.1 per cent in its value against the dollar with the central bank abstaining from mopping up dollar supplies in the foreign exchange market.

Market participants had suspected that the RBI had not contained the domestic currency's recent appreciation due to its possible fallouts on inflation.

He reiterated the RBI stand that the exchange rate was market-determined and that there was no specific target rate for the Indian currency.

He also said there is no ``linkage'' between currency movements and the central bank's inflation view. He also added that the RBI's forecast that inflation would fall to 4.0-4.5 per cent is still relevant. Last Friday the inflation rate dipped below the 5 per cent to 4.91 per cent.

On finalising the date for the upcoming monetary and credit policy for fiscal 2004-05, he said the central bank was internally studying all issues and is to announce it in a week's time.

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