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India is less vulnerable than other emerging markets despite recent falls in the rupee because of improved fundamentals, including lower inflation, said a senior policymaker aware of the central bank's thinking on exchange rates.
The Reserve Bank of India will also not target a level for the rupee and will allow the exchange rate to be market determined, the official added, reiterating the central bank's policy.
"We are less worried as overall market conditions are better, like fiscal condition is within control, current account deficit is low, inflation is falling," the official told Reuters, declining to be identified discussing the country's exchange rate policy.
The official said the RBI continues to monitor markets via a small team that meets at least once a day.
The Indian rupee fell to a 13-month low against the dollar on Wednesday on fears of foreign selling and recovered later on likely central bank intervention, according to traders.
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