Amid the rupee touching a record low of 58.96 to a dollar,the Finance Ministry today said it is “not unduly disturbed” by the fall,and the domestic currency will stabilise in the next 3-4 days with large foreign fund flows.
“This is a temporary phase. This is simply a correction. Our indication is some of the FIIs are now poised to bring in large funds. In next 3-4 days,we will see a mid-course correction,” Department of Economic Affairs Secretary Arvind Mayaram told reporters here.
He said in the coming days the foreign institutional investors (FIIs) would put in funds into the debt segment which would help the rupee inch up from the current levels. “Certainly we are not happy about it,but we are certainly not unduly worried about it. There will be a course correction…. Rupee is going to stabilise and we are going to see a positive movement,” Mayaram said.
The rupee has lost over 2.5 per cent in the two trading days of this week and nearly 10 per cent in the past six weeks on concerns of scaling down of stimulus packages by the US.
It today hit a new all-time low of 58.96 intra-day,slumping below the life-time low of 58.16 touched yesterday.
Mayaram said emerging economies around the world are facing currency depreciation with South African currency depreciating by 11 per cent. He said the rupee would recover as the country’s economic fundamentals are strong and government is taking steps to increase fund flows.
Overseas investors have pulled out more than Rs 7,600 crore (USD 1.35 billion) from the Indian debt market in the first week of this month owing to weakness of the rupee.
During June 3-7,FIIs were gross buyers of debt (Rs 2,487 crore),while they sold bonds worth Rs 10,162 crore resulting into net outflow of Rs 7,675 crore (USD 1.35 billion).
FIIs were net buyers in equity markets with an investment of Rs 118 crore (about USD 21 million) during the week. With this,the total foreign investment in the equity market has reached Rs 83,322 crore so far this year.