Finance Minister Pranab Mukherjee has said that the Reserve Bank of India is keeping a close eye on the value of rupee against dollar. Talking to reporters outside Parliament, Mr Mukherjee however said that RBI can not make much intervention as the rupee volatility is because of uncertainty in the international market. He added that the situation will improve if Foreign Direct Investments in the country increases.
The Finance Ministry today said that the Reserve Bank and the government is monitoring the situation about rupee depreciation. Finance Secretary R S Gujral said that the movement of Rupee is determined by market forces and whenever there is excessive volatility the RBI will intervene as the situation warrrants. Speaking to reporters on the sidelines of sidelines of 35th meeting of the Heads of National Drug Law enforcement Agencies at Agra, Mr Gujral said the RBI will take appropriate action as required .
The Indian rupee is the fourth most depreciated currency in the world and the most depreciated in the Asian continent. The RBI has attributed the movement to demand-supply factors and said it is happening globally. A weaker rupee is a matter of concern for India as it depends on imports for over 70 per cent of its oil and gas requirements and the depreciation of the local currency has made imports more expensive.
The depreciation of the rupee comes at a time when headline inflation has remained above the 9 per cent mark for 11 consecutive months. Undeterred by uncertainties in the stock markets, the Finance Secretary said the government is weighing several options for PSU stake sale and there is no reason to lower the ambitious 40,000 crore rupee disinvestment target for this fiscal. He said options have been multifarious and have been listed out.