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No panic reaction- FM on rupee slide
June 22, 2013, 3:35 am

The Indian finance minister has expressed unhappiness over the volatility of currency movement. [AP Images]

The Indian finance minister has expressed unhappiness over the volatility of currency movement [AP Images]

In a bid to diffuse investor tensions over the rupee slide, India’s finance minister P Chidambaram has said there is no need for panic as the Reserve Bank of India would take action whenever necessary.

At a press briefing on cabinet decisions, Chidambaram said: “We are watching the situation. The 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, it’s happening around the world.”

The Indian rupee on Thursday plunged by a whopping 130 paise to hit a life-time low of 60 against the US dollar.

The finance minister noted that volatility in currency movements were being witnessed in other parts of the world as well.

“We are not happy, we are unhappy [over] what’s happening…But that’s an impact that every currency in the world [is facing] because of certain announcements made by the US Federal Reserve,” he said.

The US Federal Reserve chairman Ben Bernanke’s statement indicating a likely scale-back of its monetary stimulus programme later this year has sent tremors throughout emerging markets.

“Why should there be such a reaction in the world market. Obviously that money which is being pulled out from all emerging markets will ultimately have to find a place,” Chidambaram said.

The Indian government, meanwhile, is ready to look at the proposal of hiking FDI caps in various sectors next month, announced the finance minister.

“FDI cap review may come up before Cabinet in third week of July,” he said.

Source: Agencies