The government ruled out any “knee-jerk reaction” to tackle the fall in rupee and said appropriate measures would be taken after taking into consideration the global situation.
Against the backdrop of the rupee breaching the 69-mark versus the US dollar and touching lifetime lows on Thursday, Finance Minister Piyush Goyal emphasised that there is no need for any knee-jerk reaction to deal with the situation.
The rupee closed at an all-time low of 68.79 on Thursday due to multiple headwinds, including concerns over inflation and weak global cues. The currency recovered lost ground Friday to touch 68.36 in afternoon trade.
“I have full faith that the RBI, which manages foreign exchange and rates, and the government will sit together and discuss. We will take a call on appropriate measures taking into consideration the global situation,” he noted.
“Knee-jerk reaction is not called for. One has to work in an organised market and in an organised fashion,” Goyal told reporters on Friday.
In 2013, when the rupee hit 68, the then RBI governor Raghuram Rajan introduced Foreign Currency Non-Resident Bank (FCNR-B) deposits under which USD 32 billion came to India for three years. Following this, the rates stabilised, he said on the sidelines of a conference.
“We have returned those USD 32 billion and if you see in last five years there has not been any depreciation in rupee. If you look at macroeconomic data, there could be some speculation because the foreign exchange reserves was USD 304 billion and it was USD 425 billion at the end of 2017-18,” Goyal said.
The minister said the Current Account Deficit (CAD), which was 4.8 per cent in 2012-13, came down to 1.9 per cent in the last fiscal. Similarly, fiscal deficit that stood at 4.5 per cent at that time fell to 3.5 per cent, he said.
“Our macroeconomic indicators from all respect are better today. But you know global environment, there was some announcement with respect to oil, interest rate in US have hardened. So, there is a flight of capital towards the US,” he added.
Goyal, who also holds the Corporate Affairs Ministry portfolio, addressed an international conference on ‘Professionals of the Future: Thoughts on 2018 & Beyond’ organised by the Institute of Cost Accountants of India.