New York: As the Indian currency moved closer towards the Rs 50-to-a-dollar mark, finance minister Pranab Mukherjee on Thursday said the Reserve Bank of India will intervene in the foreign exchange market “as and when the situation warrants”.
However, “Right now, there is no such situation,” he told reporters here, after meeting leading Indian industrialists at an investment forum.
“The RBI governor has made it quite clear that as and when the situation warrants, the RBI will intervene. Right now, there is no such situation,” Mukherjee said.
In the midst of risk aversion by global investors in the emerging stock markets, rupee has lost value sharply against the US currency. Crossing Rs 49, the Indian currency is moving fast towards the Rs 50-to-a-dollar mark.
While a weak rupee helps exporters, it poses a serious problem for a country which meets over 75% of its crude oil requirement through imports. The landed cost of imports become expensive, as the local currency loses value against the US dollar.
Mukherjee pointed out that the international environment is an “area of concern”, particularly the high ratio of sovereign debt to the GDPs of euro zone nations and the slow pace of recovery in industrialised countries.
Inflationary pressure and forex volatility in emerging markets is posing serious concerns, he added.