Govt not to intervene to boost Re, fall an aberration: Mayaram

Govt not to intervene in Re, fall an aberration: Mayaram
The recent free-fall of the rupee is an "aberration" and the currency will correct itself soon once the outflows get contained, Economic Affairs Secretary Arvind Mayaram said here today "What we are seeing on rupee today is primarily on account of global developments and not so much due to domestic issues.

"The currency will correct itself soon as our fundamentals are very strong, and the economy is on the right-track. We are seeing green shoots of growth and inflation is coming down," Mayaram told an investors summit here. He also based his optimism on the likely improvement in the current account deficit (CAD), as gold imports in the past two weeks have come down substantially. "I think the moderation in CAD will take place very soon." Ruling out any government intervention to arrest the fall of the rupee, he said, "We don't believe there should be an intervention to support the rupee... Fiscal deficit is completely under control, though CAD is an issue. I think the measures taken to boost exports should help moderate the current account deficit." Rupee hit a life-time low of 58.98 to the dollar intra-day yesterday, though it recovered to close at 58.39. Since May the currency has lost 5.7 per cent and since January 8 per cent against the greenback. The rupee ruled firm by gaining 21 paise to 58.18 per dollar on fresh selling of dollar in the late morning trade today. Mayaram also ruled out launching NRI bonds to stem the rupee fall and said there should be no panic over the depreciation.

He exuded confidence that there will not be large outflows from the country. "If the macroeconomic parameters continue to improve, which we believe they are improving, then it certainly would have a positive impact on the rupee. We are not saying that the government will take any specific measures for the rupee, but we will continue to work towards strengthening the macroeconomic parameters. "This in effect has an overall growth impetus and improves the value of the rupee also," he said.


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Story first published: Wednesday, June 12, 2013, 12:50 [IST]
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