RBI says rupee stable now
Hyderabad: Noting that the rupee is stable now, the Reserve Bank of India Thursday said all necessary measures are being taken to check the fall in currency.
"Whatever measures are necessary, whatever measure is possible within purview of the RBI, whatever best thing can be done, the RBI is doing," RBI Deputy Governor K C Chakrabarty told reporters after the meeting of FSDC sub-committee.
The rupee has fallen from 45 level per dollar in May 2011 to 56 level at the end of May this year, depreciating by over 24 percent due to a combination of deteriorating global risk sentiment and weak economic fundamentals.
"... All the regulators are doing their job, including the Government of India. It (rupee) is stable now," Chakrabarty said.
Last month, RBI Governor D Subbarao had indicated that the Reserve Bank may sell dollars directly to oil companies to ease pressure on the currency.
Direct sale of foreign exchange to oil marketing companies, he had said, "has been an issue on the table. I am not ruling it out. I am also not saying that we are going to do it right know. It's an open issue. We have done it in past. At the moment, we have not done it so far."
Several experts had suggested that RBI should consider selling foreign currency to oil companies as they withdraw huge amounts to buy crude in the international market.
The downward spriral in rupee's value has been majorly attributed to external factors, especially the global slowdown and euro-zone debt concerns.
However, domestic concerns too have affected rupee's value adversely. The local unit has deteriorated due to weak macro economic indicators of the economy. The twin deficits -- current account deficit and fiscal deficit -- are weighing on the demand for rupee.
The growing twin deficits and negative market perceptions, along with concerns on slowing growth, persistent inflationary pressures were discussed at the meeting of the sub-committee of FSDC.
The sub-committee of Financial Stability Development Council's (FSDC), chaired by Subbarao, also reviewed the recent global developments, specifically in the Eurozone and the US, and their consequences on the Indian economy, at the meeting.
The domestic unit had slipped to a record low of 56.52 on May 31.
Meanwhile, the rupee weakened by 12 paise from its previous close to end at 55.80 against the American currency.