For Plunging Rupee, Finance Minister Arun Jaitley Blames "Global Reasons"

The rupee declined 17 paise against the US dollar to close at 71.75 on Wednesday.

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Rupee today fell for the sixth consecutive session against the greenback.

New Delhi: 

Highlights

  1. Rupee closed at a new low of Rs 71.75 against the dollar on Wednesday
  2. Mr Jaitley says compared to 4-5 years ago, rupee "is better off"
  3. Says no need for "panic and knee-jerk reactions"

Finance Minister Arun Jaitley today said the unprecedented fall of the rupee against the dollar was not confined to India and the reason for it was "global". There was no need for "panic and knee-jerk reactions", said the finance minister hours after news agency Reuters reported that the Reserve Bank is likely to have stepped in to check the free-fall of the rupee.

The rupee declined 17 paise against the US dollar to close at 71.75 on Wednesday, marking the sixth straight day of the slide against the greenback. The fall has been triggered by rising crude prices and US investors pulling out overseas investments.

"There are no domestic reasons... Reasons are global. In the last few months, the dollar has strengthened against every currency," Mr Jaitley said.

The finance minister, who recently joined work after recuperating from an operation, said compared to other currencies, the rupee is in better shape.

"Most of the other currencies of the world, compared to what it was 4-5 years ago, rupee is better off," Mr Jaitley said. It has either "consistently strengthened or remained in a range and not weakened," he added.

The minister also said he supported the Reserve Bank of India's action. The central bank is likely to have intervened mildly in the forex markets on Wednesday, news agency Reuters reported, quoting traders.

The bank is expected to have sold dollars at 71.80 rupees per dollar in the local spot forex market to stem a sharp fall in the Indian currency.

"RBI is certainly doing whatever is necessary. I don't think there is any need for the world's fastest-growing economy to come out with panic and knee-jerk reactions," the Finance Minister said.

On Monday, Foreign institutional investors (FIIs) sold shares worth a net of Rs. 21.13 crore.

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