Finance minister P Chidambaram on Friday asked investors not to press the panic button and promised that the Reserve Bank of India will intervene,when necessary,to stem the decline of rupee.
We are watching the situation,RBI will take whatever action it has to take. We have good economic advisors. We will do whatever has to be done. My request is you should not react in panic,its happening around the world, he said.
His comments come a day after the rupee touched a record low of 59.98 against the US dollar during intra-day trade. However,the currency recovered after his statement to end the day 30 paise higher at 59.27 against the US dollar.
Pointing out that India is not insulated from developments in other countries,Chidambaram expressed unhappiness over the recent rupee slide. Thats an impact that every currency in the world (is facing) because of certain announcements made by the US Federal Reserve.
The finance ministrys chief economic adviser Raghuram Rajan had said out on Thursday that currencies of many emerging economies have also been similarly impacted.
The depreciation in these currencies is being attributed to the statement by the Federal Reserve chief Ben Bernanke that the US may start scaling back its monetary stimulus programme later this year.
However,Chidambaram questioned the panic in global markets and said that the Bernankes statement has been misunderstood.