The rupee has recovered to trade at 63 level after hitting its life-time low of 68.85 towards August-end. "The rupee at the current level is well corrected. Stability is returning to the foreign exchange market. As capital flows return and as CAD begins to fall, this tendency will strengthen," Rangarajan said while releasing Economic Outlook for 2013-14.

"Ultimately the value of rupee depends upon the level of the current account deficit, the level of capital flows and what is happening in the rest of the world. Therefore, it is a combination of factors that ultimately impact the value of rupee," he said.

The domestic currency jumped 425 paise in five straight sessions starting September 7 on optimism sparked by steps announced by RBI Governor Raghuram Rajan, who took over on September 4, to rescue the battered financial markets.

Asked about the impact of likely tapering of quantitative easing, if announced, by Fed next week, Rangarajan said, "I believe that foreign exchange markets have already digested it. All the impact we have seen is in terms of what the Fed will do."

Stating that there is no unique way for determining what the appropriate value of the rupee, he said many steps have been taken recently in order to stabilise the rupee and allay the fears of investors and to restore the confidence in the economy. The rupee was trading at 63.4 level at closing stages of today's trade at Inter-bank Foreign Exchange Market.

PTI