Delhi shrugs off rupee gains against the dollar
05 Apr 2010
New Delhi: Rupee gains against the dollar are not worrying the New Delhi establishment overly even though the Indian currency looks all set to firm up further as the year progresses. As for now, Delhi is prepared to tolerate a stronger rupee, according to atop executive in the finance ministry.
"The situation is fluid now. Let us wait and watch," secretary Ashok Chawla told reporters.
The comment came even as rupee trades at 44.63 to a dollar, well below its level of 50.73 to a dollar on 31 March 2009. This marks a gain of more than 10 per cent against the greenback over the past year, and has raised concerns that the Reserve Bank may intervene in the markets to halt further strengthening as this may damage prospects for local exporters.
Market traders said the comments would calm fears of a shift in the current stance of the bank to stay aloof from intervention even as the currency's rally looks set to pick up steam.
This is a likely scenario, say market analysts, as global economic recovery picks up pace and people shift investment attention to one of the world's fastest-growing major economies.