Centre rules out knee-jerk reaction as rupee recovers
After crashing to life-time lows on Thursday, the rupee staged a spirited recovery to end higher by 33 paise at 68.46 against the US dollar on Friday even as the central government ruled out any knee-jerk reaction to the currency fall.
Mumbai: After crashing to life-time lows on Thursday, the rupee staged a spirited recovery to end higher by 33 paise at 68.46 against the US dollar on Friday even as the central government ruled out any knee-jerk reaction to the currency fall.
Propped up by heavy dollar selling intervention by the RBI, the Indian unit touched a fresh intra-day high of 68.35. This was the first gain posted by the rupee in the last four sessions.
Buoyed by the recovery, the government ruled out any "knee-jerk reaction" to tackle the fall in rupee and said appropriate measures would be taken after taking into consideration the global situation.
Against the backdrop of the rupee breaching the 69-mark versus the US dollar on Thursday, Finance Minister Piyush Goyal emphasised that there is no need for any knee-jerk reaction to deal with the situation.
The rupee closed at an all-time low of 68.79 on Thursday due to multiple headwinds, including concerns over inflation and weak global cues. The rupee's previous all-time closing low was 68.73, touched on November 24, 2016. "I have full faith that the RBI, which manages foreign exchange and rates, and the government will sit together and discuss. We will take a call on appropriate measures taking into consideration the global situation," he noted. "Knee-jerk reaction is not called for. One has to work in an organised market and in an organised fashion," Goyal told reporters here.
The currency recovered lost ground on Friday to touch 68.36 in afternoon trade. Overall forex sentiment, however, remained cautious due to rising crude prices and concerns over fiscal slippage. The rupee largely took cue from weak dollar overseas, despite month-end greenback demand from corporates and oil importers.