NEW DELHI: Finance Minister P Chidambaram today said there is no need of panic over rupee depreciation against the dollar and assured investors that policymakers will take steps to curb volatility in the forex market.
“I don’t think we need to panic about what is happening in rupee. Yes, it does put pressure on inflation, it puts pressure on subsidy bill, specially on imported commodities.
But I think rupee will find its level. And I think authorities will take measures to ensure there is no volatility,” he told reporters here.
The Minister further said the rupee will regain the ground it lost against other currencies in the past few days.
“The rupee will find its level and it’s quite possible that rupee will regain some of the losses it suffered in last few days,” Chidambaram said.
Recently, the Reserve Bank liberalized norms for repatriation of exports proceed and also asked units in the special economic zones (SEZs) to bring back export earning to India within 12 months from the date of shipment.
Chidambaram further said what is happening with rupee is not unusual to India as currencies of countries with high current account deficits are taking hit.
“I believe due to misinterpretation of (US Federal Reserve Chairman) Ben Bernanke statement and some other factors, all countries with CAD have taken hit on currencies. But that does not mean, rupee will continue to depreciate.
“Rupee will find its level. We are concerned about the volatility,” he said, adding for about 10 months — from August 2012 to nearly end of May 2013 — rupee was remarkably stable.
Rupee, which had touched life time low of 58.96 against the US dollar on Tuesday, was trading above 58 level today. –PTI
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