New Delhi: Finance minister Arun Jaitley on Wednesday said there is no need for panic or a knee-jerk reaction in view of the sharp rupee depreciation as it is driven by global factors.

“If you look at the current economic situation, no domestic reason can be attributed to it. The reasons are global. The upheaval will eventually settle down and the inherent strength of the economy will play an important role," Jaitley told reporters after a cabinet meeting.

The rupee on Wednesday fell further against the US dollar on concerns of an emerging markets contagion. During the day, the currency hit a fresh low of 71.97 per dollar but recovered slightly on the intervention of the Reserve Bank of India. The rupee ended the day at 71.76 per dollar, down 0.27% from Tuesday’s close of 71.57.

This is the sixth consecutive session when the Indian currency has fallen.

Jaitley said the dollar has strengthened against all currencies.

“Most currencies have weakened against the dollar. Rupee has been better off compared to other currencies," he added.

The finance minister said external factors like oil price rise and currency war also impact India. “We are a net buyer of oil. When crude oil price goes up, it adversely impacts us. We are not in a trade war, but if countries in the neighbourhood devalue their currency, it impacts us," he added.

Defending the National Democratic Alliance (NDA) government’s record of inflation against the previous government, Jaitley said the Bharatiya Janata Party, when in the opposition before 2014, was right in criticizing the United Progressive Alliance (UPA) government as there is a significant difference between the double-digit inflation seen during the UPA regime and the current below 4% inflation.