The Reserve Bank of India and the finance ministry should work together to ensure that the rupee does not depreciate further from the current levels, Assocham said Sunday. The rupee recovered from its record low by rising 18 paise to 68.61 against the US dollar in early trade on Friday due to fresh selling of the American currency by banks and exporters.
According to the chamber, further depreciation in the value of the rupee coupled with rising crude oil prices could subject India to “imported inflation”.
“We are sure, the RBI and finance ministry helped by robust foreign exchange reserves, would step in at each volatility point to safeguard the macro-economic stability,” Assocham Secretary General D S Rawat said.
He said while the RBI has been rightly leaving the foreign exchange rates to the market, it must step in at unusual times of uncertainty and volatility caused by a combination of geo-political factors such as the US stand on the Iran nuclear deal, less than adequate rise in crude production by the OPEC member countries and exerting pressure on the emerging financial markets.
“Besides, the commerce ministry should also step in to ensure that the exporters are facilitated, to the maximum, to push exports and the inward remittances, as the import demand for dollar rises up. The non-essential imports can be curtailed and the trade deficit should be kept in check and not to be allowed to balloon” Rawat said.
To give a comfort level to the foreign portfolio investors, the SEBI, RBI and finance ministry should further simplify the rules for investing in the secondary debt and equity markets, he added.