RBI defending wrong rupee levels

8220;The rupee 40.0 to the dollar does not represent fair value on the rupee to us, and the Finance Minister is quite wrong to suggest that it is,8221; it said.IDEA8217;s real effective exchange rate REER estimate point to levels closer to 45.00, Davitte said.

8220;8230;This intervention is doomed to fail as India8217;s balance of payments deteriorates in line with an uncompetitive rupee,quot; Davitte said.

In the near term, the RBI steps will aid the rupee to stabilise around 39.00-40.00 by making moves to short the local currency more expensive, and also by bringing better volumes back into the foreign exchange market, he said.