Sovereign bond option open to arrest rupee depreciation: FinMin

Sovereign bond option open to arrest rupee depreciation: Fin
The continuous plunge in rupee has led to its depreciation by over 12 per cent against the dollar since the beginning of the fiscal, for which the government is mulling strategies to overcome.

The government in a statement to the media over the concern of economy said that all options were being considered, and more dollar inflows through a bond issue would help arrest rupee depreciation.

"All options are on the table and are examined from time to time. Steps are taken by the government at the appropriate time," a Finance Ministry statement said.

The Indian currency hit a lifetime low of 61.21 to a dollar on July 8, forcing the central bank and capital market regulator SEBI to take unconventional measures to arrest the slide.

However, bond issue has been several times used in the rescue of the Indian economy. Earlier, it has been used as a tool to curb the rupee fall in past in 1991, 1998 and similarly in 2001, said the media report.

Moreover, the rupee on Monday fell by 37 paise to close at 59.72 following month-end dollar demand from oil importers and some custodian banks coupled with capital outflows. During 2012-13, the current account deficit hit a record high of 4.7 per cent of GDP.

Read more about: bond issuance, rupee depreciation
Story first published: Tuesday, July 23, 2013, 9:30 [IST]
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