Finance Minister Arun Jaitley on Wednesday said that reasons behind the unprecedented fall of the rupee against the dollar were global and there was no need for “panic and knee-jerk reactions”. “There are no domestic reasons… Reasons are global. In the last few months, the dollar has strengthened against every currency,” he said.
The rupee declined 17 paise against the US dollar to close at 71.75 on Wednesday. That marked the sixth consecutive session with the rupee settling lower against the greenback.
Mr Jaitley said the rupee “has either consistently strengthened or remained in a range and not weakened”.
“Most of the other currencies of the world, compared to what it was 4-5 years ago, rupee is better off,” Mr Jaitley said.
He also said that he supported the Reserve Bank of India’s action. “RBI is certainly doing whatever is necessary. I don’t think there is any need for the world’s fastest-growing economy to come out with panic and knee-jerk reactions,” the Finance Minister said.
The central bank had likely intervened mildly in the forex markets on Wednesday, traders told news agency Reuters, as the rupee hit a fresh low.
The RBI is expected to have sold dollars at 71.80 rupees per dollar in the local spot forex market to stem a sharp fall in the Indian currency.