Let the rupee find its own level — that was the broad message conveyed by senior economists to the Reserve Bank of India (RBI) Governor Sanjay Malhotra in a meeting in Mumbai on Friday. Economists are learnt to have communicated to the central bank chief that the RBI’s current stance on rupee is the appropriate way to deal with the ongoing situation in the currency market and that RBI should allow rupee to adjust rather than hold it in one place, two people aware of the discussion said.The key debate over whether the RBI’s monetary policy actions should focus on the quantity of money or price of money featured in the meeting. “The discussions featured mainly around liquidity, interest rates, rupee and macroprudential measures of the RBI. Many participants raised the need to ease liquidity to the RBI Governor but there was no broad consensus on the method to be adopted to achieve the goal. 

While easing liquidity was cited as one of the most important requirements by the economists to the RBI, many also argued for a rate cut citing growth slowdown. However, it was a divided house between the economists in the meeting, with those representing banks suggesting measures to ease liquidity over a rate cut, one of the persons cited above said.