New Delhi, Oct. 30 -- The International Monetary Fund (IMF) on Thursday said exchange rate flexibility should remain the preferred policy response to help India adjust to energy shocks, amid reports of large-scale Reserve Bank of India (RBI) intervention to support the rupee.

"Our view is that the rupee should be the first line of defence in the face of these shocks. So, allowing the exchange rate to move freely to reflect the impact of these shocks is important to help the Indian economy adjust to the shocks," IMF Communications Director Julie Kozack told reporters.

Kozack said monetary policy tightening could be considered to preserve price stability if rupee depreciation began feeding into inflation, reported PTI.

Rupee should absor...