Home » Business » Falling rupee: RBI says no intervention yet
Falling rupee: RBI says no intervention yet
Source: PTI September 23, 2011 14:54 IST
The Reserve bank of India on Friday said its intervention in the forex market, if any, would be limited to curbing volatility, but as of now, the situation does not call for any action even though the rupee has fallen to its weakest level in 28 months.
"We, at this point, do not see any intervention from a rate targeting view point. That is something that would reflect a change in policy stance, which we are not doing at this point," RBI Deputy Governor Subir Gokarn said in an interview to a private Indian news channel.
Economists and experts have suggested that the central bank should intervene in the Indian forex market to halt the sharp depreciation in rupee value.
The falling rupee has become a cause of concern for policymakers as it could further push up inflation, given that the country imports about 80
per cent of its crude oil requirement and pays for the same in US dollars.
"If we do intervene at all, it would be with a very narrow perspective or narrow objective of smoothing of what might be a very volatile market situation, but nothing beyond that," he further said.
The deputy governor's remarks came even as the Indian currency fell to Rs 49.90 per US dollar, its lowest level since May 14, 2009.
On Thursday, the rupee had shed 2.5 per cent to post its biggest single-day loss in nearly three years.
Tracking the meltdown in global stock markets, the rupee had on Thursday plummeted by 124 paise to close at Rs 49.57/58 per US dollar, setting off alarm bells in policymaking circles, as the weak domestic currency will make imports costlier and fuel inflation.
Source:
PTI© Copyright 2024 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.
Recommended by Rediff.com
Liquidity not under stress: RBI
2G scam: CBI defends PC in SC, blames DoT for all wrongs
The IMF's gloom-doom report for India, world
How teaser home loans benefit banks more than you
'Sub-8% growth will bring down inflation'
© 2024 Rediff.com