RBI, govt monitoring rupee movement: FM

Agra: With the Indian rupee falling to a historic low against the US dollar, the Finance Ministry today said the Reserve Bank and the government are monitoring the situation. "The RBI and government are monitoring the issue. While the movement of the rupee is determined by market forces, whenever there is excessive volatility, the RBI will intervene as the situation warrants. RBI will take action as required," Finance Secretary R S Gujral told reporters on the sidelines of the 35th Head of National Drug Law Enforcement Agencies (HONLEA) meet here.

The rupee slid past Rs 52.50 per dollar in opening trade today before dropping to the lowest level in history of Rs 52.73 per dollar on sustained demand for the US currency from banks and importers. When asked what level the rupee exchange rate would be a concern, Gujral said that excessive depreciation of the rupee impacts India`s import bill.

"Excessive depreciation of the rupee does impact our import bill. With the marginal decline in the crude price, which is close to USD 107 (per barrel), it obviously gets lost through the depreciation and definitely our import bill for fertilisers and others also gets impacted," he said.

The rupee is the fourth-most depreciated currency in the world and the most depreciated in the Asian continent. The RBI has attributed the movement to demand-supply factors and said it is happening globally.