(Oct 13): Billionaire banker Uday Kotak said India should allow its currency to find its own footing, arguing that uncertainty over policymakers’ intentions can keep markets guessing as global capital flows shift.

“My personal view is we should let the rupee find its own level and, over time, the true strength of the economy will play out,” Kotak said at Bloomberg’s New Economy Forum in New Delhi.

A prolonged disruption to shipping through the Strait of Hormuz has pushed up crude oil prices and unsettled global markets, putting the rupee under pressure against the US dollar.

The Reserve Bank of India has stepped up efforts to contain the volatility in the local currency, which is down close to 6% against the dollar this year. The central bank has publicly said it intervenes to curb volatility in the foreign exchange market and does not target any particular level of the rupee.

Kotak said that if markets do not know of a level the policy maker is trying to justify, “the markets will be guessing”.

Kotak, India’s richest banker, has a net worth of US$15.8 billion (RM64.57 billion), the majority of which is derived from a 26% stake in Kotak Mahindra Bank Ltd, India’s fourth-largest private bank by assets.

The shift in global capital flows should also serve as a signal for India to strengthen its economic competitiveness, efficiency and domestic capabilities, Kotak said.

“And at the same time, India has to consider this as an important signal that we need to do a lot more to be competitive, efficient, self-reliant and stronger in our research and innovation,” Kotak added.

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